Cairo – Egypt’s month-long state-of-emergency curfew has not been in effect for a week but already it is hitting businesses and the capital’s economy.
The stock market lost 17bn Egyptian pounds within the first 90 minutes of opening this week and Cairo, famous for being a 24-hour city, is suffering from the closure of roads, shisha bars and neighbourhood eateries by a curfew time of 7pm.
“Our sales have reduced by 70 percent and we might have to close if this goes on for longer than a month,” said the owner of a sharwarma stand, Tareq Mohamed Abdulla, 49.
“This is the worst it’s ever been, even since the January 25 [2011 uprising]. I’ve already had to let people go.”
Mohamed Ali, a sales representative for a food company that supplies petrol stations, fears layoffs.
“We’ve already had to reduce production because demand is down,” said the 27-year-old. “People are not able to stop at gas stations at night and buy our products.”
He estimated the company could last only two months before they had to start making people redundant.
Not everything can be blamed on the past five days – things really started to get rough after the June 30 protests that toppled President Mohamed Morsi.
Political instability has since turned to widespread violence, culminating in one of the bloodiest weeks in the country’s history and the declaration of a month-long state of emergency.
Egypt is a country accustomed to living under curfews – ones people typically ignore. But this one, with security forces mandated to shoot anyone deemed to be a threat to state institutions, is different.
“Our operation has been reduced by 80 percent, ” said Mohamed Saber, 35, manager of a currency exchange in Nasr City, not far from where a huge pro-Morsi sit-in was violently cleared on Wednesday.
“Ït’s been bad since June 30, but these past four days have been significantly worse,” said Saber.
He said that people were selling US dollars but fewer were buying it. Local businesses typically pay for imported products with US currency, and fewer people buying dollars is a signal of a drop in imports and a drop in business.
Ibrahim el-Essawy, a senior economic researcher and consultant at the Institute of National Planning, told Al Jazeera there was enough hard currency in Egypt to cover imports for almost four and a half months, at most.
He said he expected the economy would continue to suffer, adding that he did not think that foreign financial aid, including $12bn from Gulf countries so far, would help much.
“Financial aids and loans are just analgesics – no economy can rely on it,” he said.
“One of the demands after the January 25 revolution was to put the army budget under auditing in parliament,” said el-Essawy, noting that this had yet to happen.
That failure brings up the issue of military wealth, and whether it would be used to help boost Egypt out of this crisis.
“The army budget looks like a black box, no one knows where the money comes from or goes to,” said el-Essawy, adding that the army looked like “a friendly country”, not an part of the state, when it does things like loan the Central Bank $1bn, as it did in 2011.
The political factor
The economic problems are inevitably linked to the political and security situations.
“I don’t think the economic situation will move forward unless the political situation moves forward first,” said Tarek Selim, an economist at the American University in Cairo.
He said Egypt was in a “transitional phase”, during which instability meant that “businesses are halting production, multinationals are halting operations in Egypt and…tourism is down”.
“This will be temporary, but how temporary is ‘temporary’? One month? Six months? A year?” asked Selim.
However, he believed that in the long run, this crisis would have a positive effect on Egypt, fostering a more nationalistic attitude toward domestic investment.
“People will be willing to take risks…on more labour-intensive rather than capital-intensive investments within Egypt,” said Selim, adding that focusing on labour would also quell or at least minimise protests and strikes.
But for the time being, he admitted that things would be difficult, especially within Egypts’s “informal economy” – the unregistered supply chain that feeds the local economy.
The multitude of fruit and vegetable vendors that dot Egyptian streets are a crucial part of that economy, and vendors such as Hisham Abu Hanafi are feeling the pain of the emergency curfew.
“Summer is my busiest time,” said Abu Hanafi, as he tended his Heliopolis stand.
“Everything will become more expensive – I will have to pay more and I will have to charge more.
“This is going to affect everything.”
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