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Egypt Meltdown Update

October 2nd, 2012 - 6:18 pm

The Obama administration asked Congress for an emergency $450 million cash infusion for Egypt last week, but congressional Republicans won’t permit it. The New York Times reported Sept. 28:

An influential Republican lawmaker, Representative Kay Granger of Texas, immediately announced that she would use her position as chairwoman of the House appropriations subcommittee overseeing foreign aid to block the distribution of the money. She said the American relationship with Egypt “has never been under more scrutiny” than it is in the wake of the election of President Mohamed Morsi, a former leader of the Muslim Brotherhood.

Morsi does not seem to have done himself much good in the Congress by allowing Islamist mobs to vandalize the American embassy in Cairo.

Turkey announced a $2 billion package for Egypt last month, but none of that money will be spent on urgent imports. From my Sept. 29 report in Asia Times Online,

Egypt announced that Turkey had promised $2 billion in aid, but Turkish press accounts doubt that Egypt will spend any of that money in the near future; $1 billion is reserved to finance the operations of Turkish firms in Egypt, which does nothing for Egypt’s urgent import requirements. The other $1 billion, the Turkish newspaper Star wrote on September 15, is just an advance on the prospective $4.8 billion loan from the International Monetary Fund (IMF).  Turkey still owes the IMF $5 billion from its borrowing after the 2008 crisis, so it will expect repayment out of the IMF money – if the IMF loan ever comes through. In the meantime, the $1 billion will sit in the central banks’ display window and won’t be spent.

And the Saudis, who were supposed to bail Egypt out, just offered a $235 million loan, a tip to add insult to injury. The Saudi monarchy hates the Muslim Brotherhood, the only entity that might overthrow it.

Returning to my Sept. 14 question — is Egypt ungovernable? — the answer is looking more affirmative every day.

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