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Egypt’s real challenge: reviving the economy

Even after a revolution that called for social justice, Egyptians must balance between legitimate demands to rectify the accumulated effect of years of social injustice, and the treasury’s ability to honor these demands.
A general view of the Egyptian stock exchange in Cairo August 18, 2013. Egypt's stock market fell sharply on Sunday as it resumed trading after hundreds of people were killed in a crackdown by the army-backed government on supporters of the Muslim Brotherhood. Banks and the stock market reopened for the first time since Wednesday's carnage, with shares rapidly falling 2.5 percent.   REUTERS/Louafi Larbi (EGYPT - Tags: POLITICS CIVIL UNREST BUSINESS) - RTX12PJU
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On Oct. 27, Sheikh Mansour bin Zayed Al Nahyan, the deputy prime minister of the UAE and the minister of presidential affairs, said, “Arab support for Egypt will not last long, and Egypt must think about innovative, unconventional solutions.”

This "warning" statement seems at odds with what Egyptian Prime Minister Hazem el-Beblawi said the previous day, against the backdrop of his visit to the UAE. He said, "The agreement with the UAE includes full support to Egypt’s economy that starts with this new funding package obtained by Egypt within the framework agreement that was signed with the Emirati government Saturday evening. It includes a new $3.9 billion [in aid], and opens the doors wide for cooperation in the future." Perhaps Emirati officials felt that their Egyptian counterparts were seeking to commit them to limitless support that knows no ceiling or end. Thus, the minister of presidential affairs' statement came to urge Egyptians themselves to take responsibility in rescuing the economic situation in Egypt. In the absence of political stability, the government is often muscled into meeting social and labor demands despite the rising budget deficit. Successive governments have been unable to implement any real structural reform to generate real revenues or savings to finance these additional social benefits. If such a situation persists, any support provided by the UAE or other parties would be like giving a blood transfusion to patient who is continuously bleeding, without stitching up the wound.

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