Egypt coup endangers its natural resources

The Egyptian army has overthrown president Mohamed Morsi, accusing him of having failed to negotiate with the opposition parties a solution after several weeks of crisis. The military have appointed the president of the Supreme Constitutional Court, Adly Mansour, as a provisional head of state to call presidential elections.

During the past days, even some members of the Morsi cabinet had voiced their position against Morsi’s self-defence and lack of dialogue once the army issued a deadline of 48 hours to initiate conversations.

Now security forces have carried out arrests among Morsi’s supporters and members of the Muslim Brotherhood. Also, the army has been deployed in a short number of cities around the country

The protests of the last days have shown that there is in Egypt a strong secular movement resolutely opposed to what they believed it was an attempt to force religious ideas on to the country. During the fall of president Hosni Mubarak, this sector of the society had’nt had a visible role. Yet, the methods deployed to achieve a change of regime this week poses some questions about the democratic nature of the process.

Beneath the political conflict, Egypt has been shaken by a profound discontent, common to all forces from institutions to the judiciary to small companies and the youth: the nation has lost its leadership among its neighbours because of a combination of political, social and economic crises.

The country’s two fundamental sectors, hydrocarbons–some fields are now depleted–and tourism–whose profits have dramatically dropped as a consequence of the turmoil–, have pushed Egyptians to the brink of a democratic revolt or a military coup.

On top of all this, a new threat came in May: the diversion of part of the upper Nile, in order to continue the construction of the Grand Ethiopian Renaissance Dam, will cause Egypt the loss of a substantial part of river water inputs, on which the Egyptian civilization has depended for at least five thousand years. Ethiopia generates 85 percent of the Nile water intake.

Although Addis Ababa officials say the construction of the dam will benefit downstream countries (Sudan and Egypt), nobody believes that the Ethiopians will just produce hydroelectric power without using the waters to prop up their own agriculture.

In little more than fifty years, Egypt has gone from being the country with almost absolute power to regulate the use of the Nile, to be forced to negotiate with all countries upstream. In fact, a treaty in 1959 between Britain, Sudan and Egypt gave the latter the right to ensure the sharing of river flows, which was set at 55,500 million of cubic metres for Egypt, and 18,500 million for Sudan of a total flow of 85,000 million of cubic metres.

Today, with other African countries raising claims, Egypt would need a military power far beyond its financial and technical capabilities for the defence of its historic rights. Instead, Egypt has seen itself dragged into political struggles and the loss of civil peace necessary to address the economic and security challenges that plague the country.

Financial insecurity is also growing. Political instability is the main cause of the rapid decline of the Egyptian currency reserves. Before the revolution that toppled Mubarak, the reserves had reached $36 billion. Currently, they are running at less than $13 billion. In recent months, Egypt has received loans of $3 billion from Qatar and $500 million from Saudi Arabia.

That instability is at the origin of the failure of government and the International Monetary Fund to reach an agreement on a loan of $4.8 billion. This loan is subject, like all IMF’s, to a reform programme that the government could hardly tackle if it wants to avoid a social explosion, because among the conditions there is the requirement to reduce commodity subsidies, liberalising parts of industry and commerce, and cuts in government expenditure.

Egypt must find the way to democracy among all these obstacles. It will not be easy.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

6 Comments on "Egypt coup endangers its natural resources"

  1. It is an arrogant idea. Ethiopia is the source of the nile and

    contributes 85 percent of the water.nile is the natural resource of all upstream and downstream nations. the 1997 UN convention on non navigational use of transnational rivers suggest that nation to share the water equitably.the 1929 and 1959 treaties
    are colonial treaties. Ethiopia was not signatory to it therefore it is not binding on us. please before u write read and analyses international law.

  2. There is no Historical right, this the term is that Egyptian used to claim that they own Nile… It is so absurd to claim that they own Nile, the Nile belong to Where it originates but they have a right to use it in justified and equitable way since they are in natural flow of the basin. But so far Ethiopian have not utilized the blue Nile because of lack of finance not because of the agreement of Egypt on the Nile with Sudan or what so ever the Egyptian say. The water originates from Ethiopian Highland and they can share after the water left Ethiopia boundary, they can only share the resources with the consent of Ethiopian, so better for Egyptian to mediate with Ethiopian, they can’t win in any option with Ethiopian and the upper riparian countries…The Geo politics, demographics and the Environment condition is being changed in unprecedented way…

  3. “We have two options, either to swim or sink together.
    I think Ethiopia chooses, and so does Egypt, to swim together,” Tedros

    Above anything else, the media which comes from those illiterate and illogical journalists will be the cause for the conflict between the 2 neighboring countries. Otherwise, the above saying by the Ethiopian Foreign minister will work……Ethiopia is not as selfish as Egypt and Egyptian!!

  4. Such type of ignorant articles indicate the current reality of the world. The world is being led to havoc because of such types people who may influence the media and provoke anger among immature and selfish politicians which, in turn, lead to destruction of nations. This is what the people of Egypt and other African countries should avoid. While Nile is critical to survival of Egypt, no one in Egypt should say Nile only belongs to Egypt while in fact Egypt does not contribute even a single drop of water. Talking about Egypt civilization, historical right and old treaties is an out-dated and greedy idea. Egypt should stop ridding an old horse and enter in to a rocket of mutual benefit if they want to reach a win-win solution

  5. Anotonio should be banned for having written utter rubbish. Repeatedly he thinks Egypt should look to military solution for a problem which can be solved in amicable way.

  6. It is sad to read such a sorry article. This writer’s assertion that military might should be used to prevent sovereign nations from utilizing their resources is sad. Even super powers like America would not be able to control a river outside of their territories. Egypt will have to share the nile waters with all the basin countries. Pushing around sub saharan african nations is over. This kind of biased garbage will not intimidate us.

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