Will Egypt Collapse?
Egypt’s economy is sinking, and sinking fast. If trends continue, Egypt is headed for a very rocky 2023.
Notice the following recent headlines:
- “Egypt’s Pound Sinks to New Low in Biggest Fall Since October Devaluation” (Financial Times, January 4)
- “Despair, Fear, Repression: Sisi Is Driving Egypt Toward Disaster” (Middle East Eye, January 17)
- “Al-Monitor/Premise Poll: Majority in Egypt, Turkey and Tunisia on Edge Over Food Access” (Al-Monitor, January 18)
The crisis started in February last year. Ukraine is one of the biggest exporters of grain worldwide. Egypt, meanwhile, is the world’s biggest importer of grain. Egypt has over 100 million people—tens of millions of which are in poverty. Because of the war, bread prices in Egypt skyrocketed in 2022. Meanwhile, Russians and Ukrainians made up roughly a third of Egypt’s tourists before February of last year. Egypt is heavily dependent on tourism. It accounted for over 15 percent of Egypt’s gross domestic product in 2018. But the flow of tourists from Eastern Europe now has almost dried up.
Egypt’s economy has never been the strongest. But new cracks in the economy surfaced last autumn. In October, Egyptian President Abdel Fattah al-Sisi secured a loan of $3 billion from the International Monetary Fund (imf). This was the fourth time Egypt went to the imf in six years.
These kinds of borrowing levels devalued the currency. The Egyptian pound fell to a record low on January 4—26.4 to the dollar. As recently as the start of last year, the pound traded for about 16 to the dollar. In a country where, as of last year, the poverty line was projected at 27.9 percent, this is catastrophic. Vivian Yee wrote for the New York Times from Cairo: “Grocery prices are stratospheric. Money is worth half of what it was a year ago. For many, eggs are now a luxury, and meat is off the table. For others, burdened with school fees and medical expenses, the middle-class lives they have worked doggedly to sustain are slipping beyond their grasp.”
Then there is the issue of the backlog at ports. The Ukraine war made foreign investors quick to pull foreign currencies out of Egypt and into safer countries. Currencies like the United States dollar are needed for international trade transactions. The exodus of currencies like the dollar meant Egypt couldn’t accept imports. Billions of dollars’ worth of goods sat languishing in Egyptian ports for days because nobody had the currencies to claim them. The crisis has been somewhat alleviated this month. But for such an import-heavy economy, any crisis like this has massive reverberations.
The situation is getting so dire that some Egyptian lawmakers are contemplating privatizing the Suez Canal. The Egyptian Parliament debated this in December. Nothing substantial came of it, but that it is even up for consideration shows how desperate the situation is.
Sisi is considered a moderate Arab leader. That is why moderate Gulf states like Saudi Arabia and the United Arab Emirates have bankrolled his government. Since Sisi took power in 2013, Riyadh and Abu Dhabi have invested billions of dollars into Egypt. Now, it looks like this foreign support is starting to dry up. Sisi admitted in November that Egypt’s “brothers and friends [in the Gulf] have developed a firm conviction that the Egyptian state will be unable to again stand on its own two feet. They also believe that the support they’ve provided [to Egypt] over a period of many years has created a culture of dependency.” Without these wealthy backers, Egypt would fall into even deeper problems.
With this all in mind, what are Sisi’s spending priorities? Surprisingly—or perhaps not surprisingly—the Egyptian government is spending like mad on vanity projects. To escape the congestion of Cairo, Egypt is currently building a new capital city. Construction started on this “New Administrative Capital” in 2015. It has cost well over $50 billion to construct, and is still incomplete. Some of the capital’s furnishings include “the Iconic Tower” (Africa’s tallest building), the largest cathedral in the Middle East, and “the Octagon,” Egypt’s new defense headquarters in a 189,000 square-meter complex (apparently a “pentagon” didn’t have enough sides). The city of Giza, meanwhile, is the construction site of the “Grand Egyptian Museum,” which will be the world’s largest museum about a single civilization. It has so far cost almost $1 billion.
There is something to be said for jumpstarting the economy with large investment projects. But such lavish spending on unnecessarily grandiose plans will only add fuel to Egypt’s economic fire. And it’s pretty clear whom these vanity projects are meant for. Weeks after the Egyptian government incarcerated thousands of protesters in 2019, Sisi said in response to the demonstrations, “So what if I have palaces?”
One only has to look back 10 years to see where these economic woes could lead.
In 2011, Egyptian revolutionaries ousted longtime President Hosni Mubarak and turned Egypt into a democracy. But instead of taking Egypt the direction of Western liberalism, they voted for radical Islamist Mohamed Morsi. Morsi was popular with the Egyptian people but was quickly turning Egypt into an Islamist theocracy.
Morsi’s power grab didn’t impress the conservative military establishment. They staged a coup against him in 2013 and replaced him with Sisi. They were able to get away with this because the Egyptian population had turned against Morsi—not because they were disillusioned with his radicalism, but because the economic change he promised never came. Sisi promised change. But instead, Sisi’s Egypt is a debt-ridden, poverty stricken plutocracy where the leader is too preoccupied with building pharaonic monuments for himself.
All one has to do is look to the kings of France and the tsars of Russia to see where these kinds of situations lead.
Dissatisfaction with the government got two presidents removed in recent memory. Could it claim a third? If Egypt were to have another coup or revolution, who would replace Sisi? And what direction would he take Egypt?
The Trumpet uses a prophecy in the book of Daniel to analyze Middle Eastern developments: “And at the time of the end shall the king of the south push at him: and the king of the north shall come against him like a whirlwind, with chariots, and with horsemen, and with many ships; and he shall enter into the countries, and shall overflow and pass over. He shall enter also into the glorious land, and many countries shall be overthrown: but these shall escape out of his hand, even Edom, and Moab, and the chief of the children of Ammon. He shall stretch forth his hand also upon the countries: and the land of Egypt shall not escape. But he shall have power over the treasures of gold and of silver, and over all the precious things of Egypt: and the Libyans and the Ethiopians shall be at his steps” (Daniel 11:40-43).
This prophecy dates to “the time of the end,” the time we are in now. The prophecies speak of two power blocs: the “king of the north” and the “king of the south.” Trumpet editor in chief Gerald Flurry for decades has identified the king of the north as a German-led united Europe. For the king of the south, he has pointed to radical Islam, led by the Islamic Republic of Iran. (Please request a free copy of his booklet The King of the South for more information.) The king of the south is prophesied to “push”—make provocative moves—against Europe. Europe responds with a devastating counterattack.
Notice that Daniel states the king of the north will also invade Egypt when it attacks the king of the south. The implication is that Egypt is allied with the king of the south. This, in turn, implies that Egypt will become Islamist once again.
Relations between Iran and Egypt haven’t been too strong in modern times. When Morsi was in power, Cairo was eager to develop relations with Tehran. These developments have been on hold since Sisi took power. But what happens if Sisi leaves office? What happens if somebody of Morsi’s ideology takes control of the country?
“Daniel 11:42 implies that Egypt will be allied with the king of the south, or Iran,” Trumpet editor in chief Gerald Flurry writes in The King of the South. “This prophecy indicates there will be a far-reaching change in Egyptian politics! We had been saying since 1994 this would occur, and look at Egypt today. The nation’s foreign policy and political orientation is visibly changing in a way that threatens to transform the region.”
To learn more, please request a free copy of The King of the South. Also read our trends article”Why the Trumpet Watches Iran Allying With Egypt.”