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Price rises & power shortages: Who could envy Egypt's next president?

With predicted increases in energy prices, electricity shortages, and pressing foreign policy issues, the new president will have a lot to do in his first few months

Dina Ezzat , Thursday 24 May 2012
The first months in top-post will be the toughest test for the next president. (Photo: Khaled El-Fiqui)
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After being sworn in, Egypt's new president may feel he has landed in an impossible situation, say officials from the ministries of finance, electricity, petroleum, transport, the interior and foreign affairs.

According to their assessment of the current state of affairs, almost nothing seems to be working well, and serious, if not frightening, challenges are about to hit.

"I keep hearing people saying that the next president will have to worry about a new wave of demonstrations that might take over the country for political purposes, but I cannot stop thinking that the demonstrations will be started not because of political aims but rather because of daily life concerns," said a source at the Ministry of Electricity and Energy.

According to this source "the country is set to face a huge electricity deficit this summer; in the best case scenario, there will be around a 20 per cent electricity shortage during the summer months, especially during Ramadan, a high consumption month for electricity," the same source said.

In this official's assessment, it is "impossible" that anything could be done to completely evade the problem. "It is a problem of generation and this requires no less than six months of hard work, and of course considerable resources, to resolve this problem," he said.

A similar alarm was raised by sources at the Ministry of Petroleum, who said that one of the very first decisions that the new president would have to make would be to raise the price of all forms of petrol – including 'solar' petrol on which trucks depend. These two sources said that the increase is inevitable to make up for the huge shortage in cash to provide for a continued flow of gas. It would not be a preferential increase – something around 20 per cent.

The trouble, according to merchants and traders, is that if there is an increase in the price of solar petrol then there would be an inevitable increase in the price of all commodities, right before the month of Ramadan.

"People will be complaining about the new president from day one, I expect," said one of the sources. He added that he expects the next president to order a "gradual" raise in the cost of petrol after Ramadan rather than before the holy Muslim fasting and festivities month to avoid "a state of public outrage."

But this decline of energy is also bound to negatively influence an already deficient transport network. According to one source at the Ministry of Transport there has been a reduction of no less than 10 to 15 per cent in public transport services during the past six months.

The declining flow of energy is a firm reason for this drop – but it is not the only reason. Cash, the source said, for importing spare parts is scarce if at all available. "Consequently, hundreds of vehicles are put temporarily out of service pending the arrival of requested spare parts," he added.

At the Ministry of Finance a source said that some foreign currency is expected to be put into the state coffers shortly after the new president is sworn in, "if the new president is a face that the donor states can reconcile themselves with," but he said that the need is much greater than the cash flow that is expected.

"And of course one should not rule out a scenario by which the next elected president is not someone that the donor states would like to support."

According to Cairo-based diplomats from some of the key donor states, the decision and volume of donations will be decided, not upon the election of just any president, but rather of a president who can attend to the very diverse demands of Egypt and who could send positive signals about Egypt's relations with the world.

"It is not that we have loads of cash; Europe is suffering a big financial problem and if we are expected to take money to give away then this has to be in support of a country that we see as a friendly nation," one European diplomat said. "We are not interfering at all with the decision of the Egyptian people but we also have our priorities."

Meanwhile, officials at the Ministry of Interior say that they might not be up to the mission of attending to their otherwise poorly-observed duties, if the next president fails to reassert what they qualify as the "respect of the police forces in the eyes of the public."

"Since the revolution, police officers are being insulted, attacked and humiliated by the public. Traffic police officers are finding it impossible to impose order; and then people complain about the traffic jams – I don’t see how we could do our work when we are not respected," said one police general.

According to this general, "there is deep wound in the hearts of police officers."

"Our men feel that they are hated, and we have been trying to reassure them, but the next president has to take measures in this line if he expects police performance to pick up," he added.

The kind of measures that the police officers have in mind include not just financial support and statements of endorsement of the role and mission of the police forces but also more "liberties of action to be accorded" to the officers.

"If a micro-bus driver [notorious for violating basic traffic rules] feels that if I stop him I cannot drag him to the police station, out of fear of facing a demonstration by other drivers, then he will simply shrug me off. I cannot do my work if I cannot impose the rules, and to impose the rules I have to have the right to be tough – you call it violations as much as you want but this is the only way," said one police officer.

Away from the home front, there are a long line of foreign policy matters that the new president needs to immediately attend to, according to Egyptian diplomats.

"We really have to move on with Africa, especially with the Nile Basin states," said an Egyptian diplomat. He added that while the attempt to undermine Egypt's annual share of the Nile waters has been "so far suspended", there is no guarantee that things will not change, even if later rather than sooner.

"We really need to reach out – high-level visits of the head of the state and new initiatives for cooperation," the same diplomat added.

And being in a desperate need of direct foreign investments, the new president, according to foreign ministry sources, will need to re-send a message of assurance and engagement to the world – and not just to the rich countries.

"We need to assure people that our laws are stable and solid and that foreign investments would be safe; we need to get over all our internal issues that are transmitting an image of instability, which is bound to cut off the inflow of investments. Above all we need to re-establish Egypt as a country of diplomatic engagement – a country who could take the lead and influence the region," said one senior diplomat. He added: "this is a long road to take, but we have to start somewhere."

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