Sunday, October 07, 2012

Is Egypt Planning To Conquer Libya?

To steal its oil?
Will Egypt seize Libya for its oil? Given Egypt’s political ideology, its history with its neighbours, and its material needs, this must be a live issue.

First, Egypt’s needs. Since the Arab Spring began almost two years ago, the Egyptian economy has been collapsing. Egypt’s foreign currency reserves have more than halved and many expect the Egyptian pound, already at its lowest point in eight years, to be devalued. Discontent is widespread. According to Gulf News, “In the past three months, Egypt has experienced increased power cuts that sometimes last for hours, while a fuel and diesel crisis has at times paralyzed the country, with mile-long queues forming outside petrol stations.” The black market price for gas canisters is 10 times higher than the official selling price; for bread it’s five times higher.


The Muslim Brotherhood government desperately needs a $4.8-billion IMF bailout to stop the bleeding but it refuses to curtail its subsidies, as the IMF demands, for fear of triggering a popular revolt. It is instead hoping for aid from oil states and the U.S. government, but even if this materializes, it will be at best a stopgap. With tourists, the country’s chief source of foreign exchange, steering clear of Egypt because of its anti-Western riots, and with foreign investors equally fearful of venturing into the country, Egypt’s options are daily becoming more limited. The temptation to look next door to Libya could be irresistible, particularly since Egypt views union with Libya as inevitable.

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