Egypt in crisis: Business collapse piles pressure on Mubarak

Factories are closed, cash machines running dry, and food and petrol shortages feared, but some say it is a price worth paying The industrial city of Abu Rawash sits in the desert beyond the pyramids. You reach it down a dusty road that seems to lead to nowhere. Then the factories and warehouses begin: Toyota, Hyundai, Mazda and Jeep deserted save for a handful of security guards sitting in front of a vacant parking lot for absent staff. Outside the gates of the Toyota warehouse Ayman Ibrahim is talking to the gatekeeper. The factories are closed, the man tells Ibrahim, who owns a window business on the same site. They won’t reopen until at least mid-week. Perhaps even Friday. No one really knows. The closures in places such as Abu Rawash have been accompanied by calls from unions for an indefinite general strike. “I’m losing £10,000 pounds a week,” says Ibrahim. “But it’s worth it, I’ve been to the protest in Tahrir Square for the past three days with my kids. Mubarak is costing me money, but he has been costing Egypt money for 30 years.” It is not only Ibrahim whose business is being hurt financially by the crisis. All of Egypt is hurting. On the main road close to the factories the large Carrefour-Dandy mall is as deserted as the car plants. Egypt’s stock market, the bourse, is closed after losing 16% in value last week. Moody’s and Fitch – the debt rating companies – have revised their outlook for the country’s bonds to negative. The country’s banks have been closed for the past two days in fear of a run on the county’s bank system. It is damaging Egypt at all levels. Already some bank machines have run out of money. Some petrol stations have begun running out of fuel. Economists are warning of the risks of shortages of staples, such as bread and water. Elsewhere shops are shuttered. Those not shut, like some in the paved streets in the financial district close to the epicenter of Egypt’s uprising in Tahrir Square, are empty. The owners sit on plastic chairs. “This is very, very bad,” says Ah Mahmoud, who owns a clothes shop called Polo. “The problems between the people and president Hosni Mubarak are bad for business. Bad for work. With no money coming in how will we eat?” The increasingly idle factories in industrial cities like Abu Rawash, 6th October and Sadat City are Hosni Mubarak’s achilles heel in a country where unemployment is running at 25%. At the ports – like Alexandria – that depend heavily on the internet to distribute cargo, shipping containers are piling up on the dockside since last Friday’s Day of Fury, when the government shut the country off from the world. All of which has a growing political significance in Cairo’s deepening crisis. For while Mubarak may believe he is able to ignore the massive swelling of public sentiment against him, bolstered by his formidable armed forces and police, what he cannot survive in the long run is an Egypt closed for business. Not least in a country where under his rule the centre of political power and economic interest have become so intertwined. It is Mubarak, say an increasing number of the country’s business community, not the people who is costing them money. Among those who appear to be distancing themselves from Mubarak is Naguib Sawiris, head of the Orascom international telecoms empire and one of Egypt’s most high-profile business figures, who said that he supported the ambitions of the protest movement, adding that a transition to democracy would be good for the Egyptian economy. Foreign investors, on whom the economy depends, are also quick to retreat and, according to assessment by Credit Suisse, are not likely to return, at least until the crisis ends, which it believes is now most likely to happen with the departure of Mubarak. Instead, it warns, foreign and private investment risks collapsing even if Mubarak manages to cling on to power. Tourism, which along with remittances from Egyptians living abroad is the biggest source of foreign currency, looks most vulnerable of all. Not far from Cairo’s Central Bank Mohammed Rajaa, Ahmed Aggag and Amr Anwar – three young tour operators for NTS – were loading files into a car near their office. “It’s an absolute disaster,” says Rajaa. “We’ve had so many cancellations. Flights have not come and we’ve had to move people to safer locations. We are losing so much money.” But Aggag agrees with Ibrahim. Even though they are facing the prospect of ruin within a month, and the loss of their jobs – he believes the price is worth paying if they see Mubarak go. “We don’t care about the business. We care what happens to the Egyptian people.” “But we can’t last much longer if all of this continues” warns Rajaa. “Maybe a few weeks. Everything is going down …” “The price is worth it,” interrupts Aggag, “if we get change.” Egypt Middle East Peter Beaumont guardian.co.uk

Posted by on January 31, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry