Protests Put Egypt’s Economy at Risk

Egypt’s economy approached paralysis on Monday as foreign commerce, tourism and banking all but halted. In addition, international companies closed plants, sent workers home or out of the country, and food staples went undelivered to stores.

The protests’ crippling effects could give president Mubarak and his new cabinet perhaps only a few weeks to re-establish order before shortages, rising unemployment and a deep crisis set in, economists said.

Entrenched corruption, the depredations of police forces and demands for free elections have all helped drive the protest movement, but for many Egyptians, rising prices and unemployment were the strongest motivations to stand up to the government. Now even many of those with jobs are not being paid, adding an edge of desperation to the rage.

Shortages have led to rising prices. Poorer Egyptians told of cutting back to just two meals a day to cope.
“I’m going to try to eat the cheapest foods, ful and falafel,” said Azza Aladin, 47. Ful is a simple dish of beans. A single mother with six children, Ms. Aladin said she had been forced to cut out a meal a day.

Many Egyptians are paid on the last or the first day of the month, and their wages often come in cash-filled envelopes. With A.T.M.’s empty and banks closed, many bosses just cannot pay.

The American giants Coca-Cola and General Motors are pulling out, as are German companies like Volkswagen and the retailer Metro, as well as the Danish shipping and oil company A. P. Moller-Maersk.

The Suez Canal, a vital transit route for oil to Europe, remained open on Monday. And although international oil companies are closing local offices, evacuating nonessential workers and family dependents and telling their Egyptian employees to stay home, there has been little impact so far on exploration and production activities centered in the Gulf of Suez, the Western Desert and the Nile Delta. One exception is Statoil, a Norwegian company, which has halted offshore drilling in the El Dabaa area west of the Nile Delta.

Fuel deliveries were not arriving at many gas stations in Alexandria. Lines of cars at those that still had fuel, long on Sunday, were growing even longer on Monday.

Source: The New York Times