It won’t decide the 2012 election, but the meltdown of Barack Obama’s Islamophile foreign policy has to hurt. Iran’s imminent acquisition of nuclear weapons humiliates a president so committed to dialogue with the evil lunatics in Tehran that he refused to support a mass outpouring of democracy demonstrators during the summer of 2009. Obama’s closest foreign policy friendship is with the Islamist president of Turkey, who has jailed more journalists than China and steered his country towards imminent economic disaster. Tayyip Erdogan may not be a terrorist, as Rick Perry said in last week’s debate, but he backs them, including Hamas.
And then there is Egypt: Even the New York Times has noticed that Egypt’s economy is collapsing, and that the country faces disaster as it runs out of money.
The reasons for his plight have been piling up all year: a virtual cutoff of foreign investment, a 30 percent decline in tourist visits and the stagnation of economic growth. The official unemployment rate is 12 percent, but among young people the real rate of unemployment is at least double that figure.
The military rulers have also presided over a period of financial turmoil. Inflation has surged into double digits, and the exchange rate for the currency, the Egyptian pound, is under heavy pressure. Foreign exchange reserves have plunged, as the government is spending about $2 billion a month in a losing battle to prop up the pound. Foreign currency reserves have fallen to about $10 billion, after certain obligations, from about $36 billion before the revolt.
Readers of this blog are familiar with the story. The only piece of news in the Times’ very belated offering is the estimate that Egypt’s foreign exchange reserves are down to just $10 billion (rather than the reported $18 billion), or import coverage of a month and a half, preparing an “all but inevitable further devaluation of Egypt’s currency that could send the prices of food and other goods soaring.” In an Asia Times essay last Monday, I observed that the Egyptian government no longer could borrow from its own capital markets, suggesting that reserve figures were much lower than reported; the Times does not say where it got the $10 billion number, but it sounds reasonable.
Egypt’s crisis was the easiest market call since Moses warned Pharaoh about the frogs; I wrote half a dozen essays in 2011 predicting it, including this one in June. Obama and his radical coterie were so persuaded that Egypt’s revolution heralded a brave new world of democratic Islam that Washington helped force out Hosni Mubarak, the closest thing America had to an ally in the Arab world. To be fair, Obama’s delusion was shared by many on the right, who hoped for validation of the “Bush Freedom Agenda” in democratic movements in the Arab world, but that is beside the point: Obama is the president, and he owns the Egyptian disaster. Egypt’s horrifying descent into Somali-style chaos will be an extended, excruciating object lesson for those who thought democracy was an exportable technology.
To adapt Freud, Egypt has gone from ordinary unhappiness to hysterical misery, thanks in large measure to the Obama administration’s decision to pull the rug out from under Mubarak. It would have happened eventually, to be sure, but the point is that it happened on Obama’s watch, as the result of Obama’s actions.