Egypt Economy Close to Meltdown

One of the worst case scenarios, at least economically, appears to now be a reality. The news site DEBKAfile is reporting that a high-ranking U.S. source in Washington has indicated that  military takeover is the only way to avoid a complete economic collapse in Egypt.  The country is now completely shut down as a result of recent strikes and walkouts.  No trains are running, no schools are open, and no tolls are being collected on the Suez Canal.   It is hard to say if the world markets are reacting to this development, but it is possible that the world is preparing for what could be an economic and humanitarian disaster.   Remember, most economies around the world are very fragile right now.  It is unlikely that they can absorb this type of blow.

Egypt's economy close to meltdown. Military coup near

DEBKAfile Exclusive Report February 9, 2011, 11:17 PM (GMT+02:00)

The biggest Arab country with a population of 82 million is on the verge of breakdown as large sections of is economic machinery are shut down by spreading strikes and workers' revolts against managements appointed by the Mubarak regime and Vice President Omar's Suleiman's leadership. 

DEBKAfile's sources report there are no trains since railway workers declared a general strike; the main state highways are barricaded by protesters. Egypt's 1,000-kilometer long Cairo-Aswan lifeline along the Nile was shut to traffic all day Wednesday, Feb. 9 with no sign that the army or security forces are willing or able to reopen it to traffic. 

As protesters continue to pour into Cairo's Tahrir Square, blocked roads are preventing produce reaching shops and markets – or even the soldiers posted in the town centers. Men of the 2nd and 9th divisions on street duty in Cairo have had no food rations for 12 hours. The disruptions threaten Egyptian towns with dire food shortages. 

The work forces of the big industrial complexes have downed tools and customs officers have stopped levying toll fees from the approximately 50 ships transiting the Suez Canal every day and netting the Egyptian treasury $3 billion a year, its main source of revenue. Around 1.300,000 foreign tourists have fled the country since the disorders began taking with them another major source of revenue. 

The closure of schools was extended Wednesday after teachers refused to go back to classrooms until Mubarak was gone. 

Egypt's foreign minister Abul Gheit said that the only way to save Egypt is for the army to step in. He rejected US demands for an immediate repeal of emergency law and accused Washington of trying to impose its will on Cairo and its advice was "unhelpful." 

A high-ranking US source in Washington told DEBKAfile's sources that the situation in Egypt is so appalling that a military takeover of the regime is no longer a threat but the only hope of rescuing Egypt from economic meltdown. Yet at this critical moment, he said, "the Egyptian army appears to have no figure capable of saving Egypt."

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