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The Current Economic Crisis in Egypt and the Attempts to Drag the Egyptian Army into a War Against Iran

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By  Dr.Nadia Helmy

The United States of America is trying to force Egypt to enter into a regional war against Iran for the benefit of the countries of the Arab Gulf region and Tel Aviv. Hence, the United States of America and its other partners in the international monetary and financial institutions are putting pressure on Cairo in this regard, through the arbitrary policies of the International Monetary Fund and its major shareholders.  And on top of them: the United States of America, Britain, France and Germany, as an attempt to oblige Cairo to agree with them to confront Iran, and with Egypt having to resort to the International Monetary Fund for the fourth time since 2016, after that game of American, Israeli and Western intelligence in confronting the Egyptian army to force it to confront Iran, after the game of withdrawing a number of major international investors from the country for purely intelligence, political and military reasons in favor of the goal of confrontation.  with the Tehran regime.  This coincided with the practice of Washington and the Western powers, through their arms in Cairo, of several artificial economic crises, such as the shortage of foreign currency in the Egyptian market, the weakness of the Egyptian pound, the rise in inflation rates, and others.

  For its part, the United States is trying to gather more allies in its war against Iran.  In this regard, it is trying to persuade the European Union to join its alliance in the war against Tehran.  Perhaps the big gap in the front of the United States of America remains the European Union, through which the Iranian regime wants to penetrate in order to weaken the American and Israeli position that is motivated and mobilized towards the danger of war.  Perhaps because of the refusal of the countries of the European Union and the countries of the NATO military alliance to bow to the American and Israeli demands to enter into direct military confrontations against Iran, it was the main direct reason for the threat of former US President “Trump” to expel the United States from NATO membership and to keep Europe alone in front of the Russian threat, which might force the countries of the European Union, from the point of view of “Trump”, at the time to modify the views of the countries of the European Union and the countries of the NATO military alliance.

From my analytical point of view, what is happening in the region in terms of the American and Israeli attempt to mobilize against Iran with Gulf support, and the attempt to drag the Egyptian army to fight without its direct interest at the present time to confront mainly with Tehran, is a war with different faces and multiple players, but Iran remains the field.  The main conflict is in a war fueled by central banks, the economic structure, oil, banking and trade at all levels.

On the other hand, the options available to Iran seem limited to confront the specter of the American-Israeli-Gulf war in confronting it, in addition to the ongoing economic war and the growing threats against it. The options against Tehran appear to be all accompanied by risks and risks.  Internally, Iran has to convince its people to bear the policy of austerity, and externally, the Iranian regime is counting on the support of China, Russia, and the armed militias that support it in the countries of the region, perhaps to threaten through it to ignite the situation throughout the region and hint at the danger of the straits and sea lanes in the Red Sea. On top of them are the Straits of Bab al-Mandab and Hormuz and the Gulf of Aden.  This may make the situation more complicated for America, Israel and their other allies in the event of entering into any uncalculated military confrontations with Iran, which Egypt and President El-Sisi are well aware of the enormity of engaging in any potential clashes with the Tehran regime.

  The point of view of Egyptian President “Abdel Fattah El-Sisi”, as a former military intelligence man, and the Egyptian army, and their response to any attempts to enter into military confrontations with Tehran and try to convince the Arab Gulf states of that, is (the cost of war), in the sense of what the countries of the entire Gulf region and the region will incur by waging a similar war.  guerrilla warfare and armed militias.  As the issue of establishing and supporting armed militias in the countries of the region has become something that everyone knows and does not need proof.  And the matter is not limited to Shiite militias backed by Iran, such as: (Lebanese Hezbollah, and the Houthis in Yemen), but Iran will also find, in the event that America, Israel and the Gulf enter military confrontations with it, great and direct support from Al-Qaeda and the nearby Taliban movement in Afghanistan.  Borders with Tehran, and there are reports indicating the Iranian regime’s complicity with the terrorist organization of “ISIS”, and all of these organizations will be used once in the event of a military confrontation with Iran, and Iran will inevitably resort to re-enriching uranium very quickly and developing ballistic weapons and missiles to confront the imminent war.  The entire Gulf and region will be destroyed, as well as the movement of the straits and sea lanes will be affected and the entire international trade movement will be paralyzed, and the security of Egypt, the region and the Suez Canal will be affected, which will disrupt the global trade movement.

And in light of the outbreak of any war against Iran, the Iranian decision-maker will be forced here to resort to and use these militias and armed groups, as a pressure card on neighboring countries, the United States of America and the Gulf. Based on this option, it is likely that the pace of terrorist operations will increase in the countries of the region in the coming period of time. This is clearly understood by President El-Sisi and the Egyptian army, so he distances himself from entering into any confrontations or clashes with Iran, not to push for the complete destruction of the region in favor of Israel in the first place, as it is the only beneficiary of that war, to spread chaos and unrest throughout the region, including the Gulf countries and Arab supporter of the war against Iran.

Perhaps that economic crisis fabricated by the West in the face of Egypt, its indirect result was that American and Western call through their monetary institutions, of the need to restore foreign direct investment as a real way out of the current crisis after the flight of investments estimated at about 20 billion dollars from investment in the Egyptian debt, according to intelligence reasons. Purely, as I mentioned in my analysis, because of the attempt of the extreme right and hardliners in Israel to enter into direct military confrontations with Iran with the generous support of the Gulf countries, and their attempt to drag the Egyptian army and involve it by force to defend Tel Aviv’s malicious dreams of bringing Cairo into serious military confrontations with the Tehran regime.  Perhaps this is what the International Monetary Fund declared explicitly in favor of Washington mainly and in support of Tel Aviv’s hard-right policies, by announcing that Egypt will be affected by the global repercussions of the Russian invasion of Ukraine, with a funding gap of $17 billion over the coming years. This is the same as what “Ivana Hollar”, head of the International Monetary Fund’s mission to Egypt, declared:

 “The reform program of the authorities in Egypt must give a greater role to the private sector, which is urgent, and it is very important that the state ownership policy be approved at the highest levels,  including by the president”

  This is what Egyptian President Abdel Fattah El-Sisi understood with the mentality of a military intelligence man, as a former head of the Military Intelligence Service in Egypt, by trying to exert maximum American and Israeli pressure on Cairo in order to enter into a confrontation with unsafe consequences to confront Iran, by giving “El-Sisi” his orders to form a “crisis committee”, to follow the situation on a weekly basis as soon as the Russian invasion of Ukraine begins, as well as current events. President El-Sisi also instructed the army to provide food commodities to citizens, after President Putin’s war against Ukraine caused the largest global food crisis, if we add to it those reprehensible American and Israeli attempts to force the Egyptian army to enter into direct military confrontations with Tehran. Perhaps this was one of the main reasons, from my analytical point of view and my reading of the general political and economic scene in Egypt, behind those tours that Egyptian President “El-Sisi” made in the Arab Gulf region, specifically those presidential tours to (Saudi Arabia, the Emirates, and Qatar).

Then, the Egyptian government, represented by the “Egyptian Council of Ministers”, issued an official report issued, based on directives and presidential orders from President El-Sisi to address the Egyptian people, in a framework of transparency to address in this report the most important issues related to the general economic situation in the Egyptian state during the year 2022. Specifically, and in the context of the official report issued by the Egyptian Council of Ministers, 17 main claims and allegations were answered, in terms of (the size of the external debt, the state’s general budget, the exchange rate, the state’s credit rating, as well as the feasibility of national projects, the terms of the Monetary Fund loan, and the rise in prices.  Crisis in the situation in banks), and other issues that occupied the Egyptian street during the last period.

This brings us to the general political scene in Tel Aviv, and that successive Israeli pressure on the regimes of the Arab Gulf states for a possible and imminent attack on Iran, and perhaps that is the main reason for the use of an Israeli extreme right-wing government at the present time, which facilitated the Israeli Prime Minister “Benjamin Netanyahu” to form an alliance that is the largest of its kind in the history of Tel Aviv is the far-right parties and the religious extremists, who are pushing for the inevitable confrontation with the Tehran regime to protect the interests of Tel Aviv.

Where the Israeli hard-right, led by Israeli Prime Minister “Benjamin Netanyahu”, raises many slogans in the direction of war against Iran, including: preserving the security of the region, assisting the Gulf countries that have signed peace agreements with Israel and others, such as the UAE and Bahrain, and indirect support for Saudi Arabia in the wake of  these multiple Houthi attacks on Saudi oil facilities, and the Iranian-backed Houthi militias targeting Saudi Aramco facilities in the Red Sea, which Iran denied, in addition to the “Netanyahu” government’s promotion in Israel towards war among most segments of Israeli society, under many and varied allegations, such as: stopping Iran from acquiring nuclear weapons, and promoting that this has become one of Israel’s most important priorities in its foreign policy.

 In the event of a confrontation between Israel and Hezbollah, the turmoil emanating from Syria and the control of ISIS, which has swept the greater part of the region, will reach directly to the Egyptian border.  This particular development was raised by President El-Sisi in an official and popular public speech to him, emphasizing:

 “We do not need additional complications related to Iran and Hezbollah”, adding: “I am against war, as crises can be resolved through dialogue”

This confirms the Egyptian President Abdel Fattah El-Sisi’s endeavor to avoid the region witnessing any tensions, especially between the Arab Gulf and Iran, or witnessing further escalation with the help of Washington and Tel Aviv. Egyptian President “Abdel-Fattah El-Sisi” left no doubts about his position, assuring that:

 “The Middle East does not need security in the Gulf, which constitutes a red line. We believe in Egypt that any threat to the Gulf states also affects our national security”, with President El-Sisi acknowledging in several official speeches to him, that:

“Security in the Gulf constitutes a red line, and we believe in Egypt that any threat to the Gulf states also affects our national security”

Tel Aviv, along with Washington, has also become involved in promoting between the countries of the region and the Gulf, primarily about the feasibility of a military war against Iran, and exporting a file for Israel’s fear of Iran’s interference in countries close to its borders, with leaks that Tehran has supplied a group of ballistic missiles and precision ammunition to its proxies in “Hezbollah group” in Lebanon and in Syria as well. Therefore, Israel announces its fear of the nuclear agenda to produce nuclear weapons for Iran and the equipment that carries it as a threat to the security and safety of the entire region and the Gulf in particular as an ally of the Tel Aviv regime through normalization and peace agreements with it. Hence, the attempts of Israeli intelligence and its Mossad apparatus to strike a number of nuclear reactors in the Iranian city of Isfahan are attempts that the Israelis are promoting internally, regionally and internationally, as a “part of Israel’s attempts to strike Iranian capabilities and prevent them from supporting their proxy groups in the region”

 The fundamental question remains here, when talking about how all regional and international parties view the extent of support that China and Russia can provide to the Iranian regime in the event of war with Israel and the Gulf, with direct US-Western support?  The answer to this question will make us analyze the reasons for Washington’s efforts to curry favor with the political system in Egypt in the first place, through the visit of US Secretary of State “Anthony Blinken” to Cairo and then his departure to Tel Aviv as part of the American game of moves and probing the pulse of Egypt and the countries of the region.  Perhaps relying on Chinese and Russian support for Iran will be one of the strongest cards that the Iranians bet on, especially given the existence of vital and necessary Egyptian and Gulf interests with the Chinese and Russians in the first place. This is what China stated directly, that it is likely to continue buying Iranian oil after the conclusion of the second phase of sanctions against Tehran in November 2018.  “Mohsen Karimi”, as deputy governor of the Central Bank of Iran, confirmed in official statements published to him in the Persian media on Monday, January 30, 2023, that (Iran and Russia) have linked the communication and transfer systems of their banks to each other, to help promote commercial and financial transactions under the sway of  Tehran and Moscow to Western sanctions.

 This Russian financial and economic support for Iran has been mainly since the re-imposition of US sanctions on Iran in 2018, after Washington withdrew from the nuclear agreement concluded between them in 2015, which was mainly between Tehran and the world powers, after which Iran was separated from the “Swift” financial network, as an International Bank Transfers, which is headquartered in Belgium. The similar restrictions have been imposed on a large number of Russian banks since Moscow’s attack on Ukraine in February 2022.  This is what was confirmed by “Mohsen Karimi”, deputy governor of the Central Bank of Iran, in a public challenge to Washington and the West with the help of China and Russia, by stressing that:

 “Iranian banks no longer need to use the Swift system for transfers and financial transactions with their Russian counterparts, which can all the parties may open letters of credit, transfers or joint guarantees between the two parties”

  This was confirmed by the Russian Central Bank, in agreement with the Deputy Governor of the Central Bank of Iran, “Mohsen Karimi”, stressing that “about 700 Russian banks and 106 non-Russian banks from 13 different countries will be linked to a new credit and banking system.”  This is without going into details about the names of foreign banks that will accept such banking and financial trading away from the global financial system of “SWIFT” for financial and monetary trading, which is officially approved internationally.

 This is precisely understood from him, as the Chinese and Russians did not leave Iran alone in the midst of the danger or the wind of any imminent military war against them.  Perhaps, in this case, Russia will try to take revenge on Washington and Tel Aviv with generous military and economic support for Iran, especially in light of its facing sanctions by the United States of America and the European Union.

 This brings us to the political scene in Egypt in a more precise and objective manner, emphasizing the smooth and clear vision of the Egyptian approach in Cairo, and that Egypt actually does not share the concern of the Gulf countries about the West’s nuclear agreement with Iran, just as Egypt did not adopt the assessment expressed by the United States of America that Iran  It supports terrorism, in addition to the fact that Egypt plays a very conservative role in the Saudi-led coalition against the Houthis, who are sympathetic to Iran.

  Hence, we conclude, based on our reading and analysis of the general scene, that this economic crisis in Egypt is fabricated by the Americans, Israelis, Westerners, and even the Gulf states, to push the Egyptian army, as the strongest armies in the region, to bear the cost and burden of the war, which is not fundamental to Egyptian interests on behalf of everyone.  precedent for Egypt, in addition to the withdrawal of a number of foreign investors, mainly, suddenly and at once, and at the same precise and sensitive time from the Egyptian financial market within the framework of “pressuring the Egyptian regime, in order to respond to the conditions of the International Monetary Fund, and those in charge of it politically and economically in the first place, who are Washington and its allies in the West,  As a part of a systematic campaign against Egypt and its army to bear the cost and burden of the war against Iran on behalf of Israel, the Gulf and everyone, and in favor of competition between Washington, Beijing and Moscow as allies of Iran in the Middle East.

Dr Nadia Helmy is an Associate Professor of Political Science, Faculty of Politics and Economics / Beni Suef University- Egypt.

Courtesy: Modern Diplomacy


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BUSINESS & ECONOMY

Inquiry on General Babangida’s Involvement in Conventional Banking despite Introduction of Islamic Finance in Nigeria

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Dear Editor,

I hope this letter finds you well. I am writing to express my curiosity and seek clarification on a matter that has caught my attention, specifically pertaining to General Babangida’s involvement in the conventional banking industry despite his role in introducing Islamic finance during the financial reforms of his military government in Nigeria. Vide your special article commemorating his 81st Birthday published in your esteemed news website: https://focus.afrief.org/trending/a-salutary-tribute-to-general-ibrahim-badamasi-babangida-architect-of-islamic-finance-in-nigeria/

It is indeed noteworthy that General Ibrahim Babangida played a pivotal role in shaping the economic landscape of Nigeria by introducing Islamic finance principles. It is fascinating to witness the implementation of Islamic finance in Nigeria, as it promotes principles that align with religious and ethical values. General Babangida’s efforts to introduce this form of finance were undoubtedly commendable, reflecting his commitment to establishing an alternative financial system that adheres to Islamic principles.

However, recent observations suggest his active participation in the conventional banking sector in Nigeria. Certainly, it is intriguing to see General Babangida’s continued involvement in the conventional banking industry, which operates under different principles. While some may argue that his involvement in both sectors is simply a matter of personal choice, it raises questions about the compatibility of his actions with the ideals and principles of Islamic finance. While the former is interest driven, the latter prohibits interest related transactions completely.

I wonder if General Babangida has ever publicly addressed this matter or explained his reasoning behind being active in both sectors. It would be enlightening to hear his perspective on how he reconciles his involvement in conventional banking with his efforts towards promoting Islamic finance. This has raised questions in my mind and perhaps in the minds of others as well.

I am keen to understand the rationale behind General Babangida’s dual engagement in both Islamic finance and conventional banking. Does this reflect a strategic approach to diversify Nigeria’s financial sector, or are there specific reasons behind his involvement in conventional banking despite advocating for Islamic finance principles?

Additionally, it would be interesting to explore the potential impact of his dual involvement on the perception and growth of Islamic finance in Nigeria. Does his presence in the conventional banking industry hinder the progress of Islamic finance, or does it have the potential to bridge the gap between the two sectors?

I believe that delving into these questions could provide valuable insights and generate constructive discussions within the Islamic finance community in Nigeria. By shedding light on General Babangida’s dual involvement and the potential implications, we can further enhance our understanding of the challenges and opportunities faced by the Islamic economy in our country.

Thank you for considering my questions, and I look forward to reading more about this topic in your esteemed Focus on Islamic Economy.

Sincerely,

 

Abba Musa Mamman Lagos

Kaduna


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10 Megatrends Shaping the World in 2024

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The report, “Navigating Megatrends Shaping Our Future in 2024”, was launched during the first day of the World Governments Summit (WGS) 2024, being held under the theme “Shaping Future Governments” from 12th-14th February in Dubai. The report examines the indicators that shape these megatrends, supported by evidence from today as well as future expectations. These trends inform decision-makers and foresight experts about various sectors and the potential opportunities in each.

Khalfan Belhoul, CEO of Dubai Future Foundation, said, “This report has been launched in line with DFF’s efforts to identify and communicate those trends with the most potential to shape opportunities and strengthen local and international partnerships to overcome current and future challenges.”

“The challenges that face us on our journey to the future require that we are agile enough to be able to adapt to rapid change. It is vital we pay attention to the signals we detect – only then can we be prepared to overcome challenges and seize opportunities. The World Governments Summit provides a platform for discussing these challenges and exploring the opportunities.”

Materials revolution

New types of materials will create a shift in the industry, with solutions based on artificial intelligence (AI) such as biopolymers, biorefineries, and chemical recycling paving the way. These solutions will facilitate the development of new biological and novel materials that could rival plastics.

Boundless Multidimensional Data

Enabled by developments such as 5G and 6G in addition to advanced connectivity, the availability of raw data will vastly increase. The Internet of Things (IoT) will continue being deployed in healthcare, agriculture, and smart cities, especially in the Middle East.

Technological Vulnerabilities

The cybersecurity sector will boom amid a sharp rise in smart home devices and wearable tech. According to a report by Allianz, the annual cost of ransomware is projected to reach around $265 billion by 2031. Meanwhile, the debate on the future of decentralised finance will continue.

Energy Boundaries

Advances in tech and the growing demand for energy will drive the pursuit of alternative sources of energy. Novel materials and machine intelligence will enhance current sources of energy, including their distribution around the world – and in space.

Saving Ecosystems

Approaches to conservation will be more interdisciplinary and future-focused, taking into account both societal and environmental factors. Driven by resource scarcity, climate change, and shifts in social values, environmental impact management will become increasingly holistic.

Borderless World – Fluid Economies

The world is witnessing a rise in unmediated transactions in finance, health, education, trade, services, and even space, which are blurring boundaries and creating more cross-border communities. Advances in communications, computing, and advanced machine intelligence will accelerate the creation of a borderless world that will change the way we work, live, and connect.

Digital Realities

The spread of 5G and 6G networks will enhance the applications of autonomous technologies and IoT. As quantum technologies become scalable and reliable, immersive experiences will become even more realistic.

Living with Autonomous Robots and Automation

Robotics and automation will increasingly be deployed across industries beyond automotive, manufacturing and supply chain logistics. This will provide opportunities for efficiency and innovation, although there will also be ethical challenges to address.

Future Humanity

New workplace norms will emerge, with people needing to adapt to non-traditional skill sets in areas such as digital literacy, communications, culture and sustainability.

Advanced Health and Nutrition

Accelerated progress in advanced machine intelligence, nano- and biotechnology, additive manufacturing, and IoT will transform health and nutrition, improving health and wellbeing for people of all ages. Technology will reduce, if not eradicate, some communicable and non-communicable diseases and enhance the sustainable use of and access to water and food.


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BUSINESS & ECONOMY

Africa’s New Online Foreign Exchange System will Enable Cross-border Payments in Local Currencies – what you need to know

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The high cost of making cross border payments on the African continent has driven governments on the continent to seek options of settling trade and other transactions in local currencies. This has given birth to the Pan-African Payment and Settlement System which was formally launched in Accra, Ghana, in January 2022.  Development economist Christopher Adam, who has studied the exchange rate policies of African countries, answers some key questions.

Why are African countries exposed in the international currency market?

Three main reasons. First, African economies are small and as such are highly dependent on trade with the rest of the world. Their exports are dominated by primary commodities including oil and gas, minerals and cash crop agriculture. On the import side, they purchase a whole range of goods – from essential commodities not produced at home such as fooddrugs and medicines, to capital goods and energy. A large proportion of these are sourced from China and other major economies of the global north. But because African countries are small relative to their trading partners they rarely have the power to determine the prices of imports and exports. They are “price takers” in world markets. And with world prices being set in the major reserve currencies of the world (the US dollar, euro, yen and renminbi), African countries are exposed to movements in these world prices. Second, “intra-African” trade is still a relatively small proportion of the total trade of African countries.

Finally, since African countries’ currencies mostly can’t be directly exchanged in international transactions, the dollar remains the most widely used currency in trade, even between African countries.

What’s required for the system to get off the ground?

The basic idea of the system is to be able to settle trade between African countries without having to use the US dollar.  There are two major challenges with that. First, intra-African trade accounts for less than 15% of Africa’s exports at present (although supporters of the African Continental Free Trade Area expect this to grow significantly over the coming decades). The African payment system therefore does not eliminate the role of the dollar (or other foreign currencies) in trade settlement entirely.

The second issue is that trade is not balanced between African countries. For example, Kenya exports goods of higher total value to Ethiopia than it imports from Ethiopia. If Ethiopia paid in its own currency, Kenya would end up with Ethiopian currency that it didn’t need. Some form of settlement currency that is acceptable to all is required – most likely the US dollar.

What are the challenges and potential risks?

Since trade rarely occurs instantaneously, some institution in the trade financing chain carries the exchange rate risk. Because of the gap between placing an order for imports and receiving them to sell in the local economy, there is a risk that the value of local currency will change relative to the currency in which the import is denominated.

In the “old” system, this risk is borne by the trader because everything is priced in dollars. The local currency value of the income from exports or the local currency cost of imports will change with movements between the local currency and the dollar, but the banks and those counterparts pricing in the dollar are protected.

Under the new system the same allocation of risk will remain in “external trade”. This currency risk is also present for intra-African trade.

An important question for the new African payment system is: who bears the exchange risk if one African currency depreciates relative to another? Should the importer carry the risk, or the exporter? Can and should the African payment system bear this risk of exchange rate movements itself? Where both currencies are volatile, traders might still prefer the relative stability of settlement through the US dollar.

The success of this system also depends on scale. The more trade settlement is routed through it, the easier it will be to settle in local currencies. Large currency imbalances will be less common. But until the system achieves this scale, the African payment system will need a strong balance sheet so that traders and participants can have confidence that settlement will be swift and risk free. It is unclear at the moment how this is to be achieved.

What is the best case scenario?

If the system can address the trade imbalance problem, provide clarity on risk management and reach scale, it could be very successful. But this is all going to be driven by underlying economic performance. Improved settlement will help but what is really driving this is the structure of trade. The more the economies of Africa can develop intra-African trade and the less dependent they are on extra-African trade, the less will be dollar dependence in trade. This growth in trade depends to some degree on trade settlement and trade financing but much more on production, consumption, trade policy and fiscal policy.

Christopher Adam is a Professor of Development Economics, University of Oxford


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