Category Archives: Economics

Burma’s Mines Desperately Need Reform as Foreign Firms Implicated in Abuse

First published in Vice News – 10 Feb 2015

Amnesty International has claimed foreign companies are profiting from serious human rights abuses perpetrated in Myanmar’s mining industry, as well as accusing the country’s authorities of violent repression and forced mass evictions in the pursuit of mineral riches.

In a report released on Tuesday, the rights group focuses on the notorious Monywa copper project, comprising the Sabetaung and Kyisintaung (“S&K” mine), and the Letpadaung mine in the country’s central Monywa District. Since beginning operations in the 1980s, the project has fallen short of nearly every good-practice indicator, according to the report, titled Open for Business? Corporate Crime and Abuses at Myanmar Copper Mine.

In 1978, a Myanmar government-owned enterprise began developing deposits at what is now the S&K mine in central Myanmar. In 1996 a subsidiary of the Canadian company, Ivanhoe Mines (now Turquoise Hill Resources) entered into a joint venture with the government-owned enterprise and reaped the rewards for over a decade.

In 2010, the Monywa project was taken over by the Myanmar military company, UMEHL, and Wanbao Mining Ltd, a subsidiary of the Chinese state-owned military company, Norinco. As is often the case with mines, it didn’t take long for the first of many abuse cases to spring up, with the initial development in 1996-97 forcibly evicting thousands of people.

“These concerns have been in the public domain since the early 2000s,” Meghna Abraham, Amnesty International’s corporate crimes researcher, told VICE News. “After all that attention, one hoped that the government would finally take some corrective measures and address the issues… and that’s just not happened.”

As well as the forced evictions, Amnesty details the lackluster environmental assessment, the opaque sales of corporate assets, and the collusion of abuse by the foreign companies involved. The report also mentions the harsh crackdowns on peaceful protesters — including the shooting dead of a woman in December 2014 and the infamous use of white phosphorous to clear a sit-in protest in November 2012.

“No one has been held accountable,” continues Abraham. “There has been no accountability of officials who have been implicated… and the companies haven’t been held accountable.”

According to the report, both the Canadian Ivanhoe Mines, and the Chinese Wanbao Mining have “built their business on a foundation of human rights abuse.” With regards to Ivanhoe, the forced evictions of the S&K mines’ inception was apparently done with their knowledge, yet the wrongs were never addressed. Wanbao Mining, meanwhile, is charged with “directly engaging” with the forced evictions and even providing “material assistance” to police during protests. Both deny the charges and wrote full ripostes, attached in the report’s appendix.

Despite the focus on just one project, the issues raised show wider-reaching structural flaws in the investment and development sectors of a country suddenly exposed to the full might of globalized capital. The report calls its own findings, “a cautionary tale for the government of Myanmar and investors.”

Myanmar has a long history of mining, with silver, zinc, lead, tin, tungsten, and precious stones having been mined since the fifteenth century. The country itself is incredibly rich in gems, mineral resources, and oil and gas reserves. Yet after undergoing the military dictatorship’s 26-year-long policy of isolation from 1962 until 1988, coupled with Western sanctions, the country found itself near destitute and with a seriously underdeveloped infrastructure.

In 2012, after sanctions on the country began to ease, foreign companies and investors eagerly spied the country’s potential. In just one example, Coca-Cola immediately returned to Myanmar in 2012 after nearly 60 years out of the country. On my last visit, a large coke poster even welcomed me to the country.

Yet with regards to the extractive industries, a restrictive 1994 mining law has meant that many companies and investors have adopted a more patient, wait-and-see approach. Meanwhile, the promise of new legislation, designed to improve practices and clear the way for further foreign investment, continues to rattle around the country’s houses of parliament.

“We believe that within the month the law will be [passed] by parliament” U Aye Lwin, secretary general of the Myanmar Federation of Mining Association, told VICE News. “I will say that there are so many possibilities for mining projects now.”

It seems to be only a matter of time before the extractive industry is capitalized on more by both domestic and foreign money, and the worry is that the old structures will continue to oblige social and environmental abuse, even if new reforms and laws are enacted.

“The challenge in implementing those reforms, once adopted, will be lack of government capacity, and lack of transparency,” Vicky Bowman, director of the Yangon-based Myanmar Center for Responsible Business, told VICE News. “But we have to start somewhere.”

Abraham believes that the Myanmar government has begun moving in the right direction, but has shown through Monywa that it is still falling short. “Definitely in the last couple of years the government have taken some positive steps; that is undeniable. I think what we are seeing is a lack of commitment to follow through, especially when, in this context, the military owns the business involved.”

The issue of the military, as well as the country’s omnipresent “crony” cliques, is yet another hurdle for reform. With strong ties to big business, the military, and politics, the cronies of Myanmar are infamous for operating with apparent impunity.

“That’s the question,” said Abraham, “will the government act when the military is involved in some of the business? So far we haven’t seen that.”

“In the case of the Letpadaung mine, this may well have been a contributory factor to the current problems,” added Bowman. “UMEHL, the military partner (in the Monywa Project), apparently has significant responsibility for overseeing community engagement by the joint venture, which is not a good starting point, given their reputation and also their lack of experience in doing this in any context.”

Nonetheless, Lwin is optimistic that with the new law and reforms, mining in Myanmar can be beneficial for the country’s economy and its people, without abrogating the rights of locals or the environment. “Now we are a member of the EITI (Extractive Industries Transparency Initiative). We are going to follow the regulations and we will be adhering to them and submitting papers to them,” he states.

Abraham is also hopeful for Myanmar’s future in the extractive industries. “The nature of human rights is we have to be optimistic,” she tells me with a chuckle, before continuing: “When we went to Myanmar, we see a clampdown, we see arrests but there is a change. The civil society space has increased. There are amazing activists and lawyers and others working on this. And I think there are people in government who are trying to make change happen too.”

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Thailand’s Multimillion Dollar Insect-Farming Sector

First Published on November 21 on Vice Munchies

A rising chorus of chirping crickets greeted Aunt Jai as she lifted the blue mosquito netting off the concrete pens outside her house. Bubbling away with enthusiasm, she quickly pointed out every little detail of her modest cricket farm.

“Those are the breeders… These are the young house crickets… There you can see some of their eggs, if you lift that cassava leaf…” For a 62-year-old, she is shockingly nimble, bouncing around between each of her 15 concrete pens, proudly showcasing the insects that have brought her so much success.

She laughed and made a sweeping gesture to the tens of thousands of crickets around her. “I used to be just a normal farmer!”


Thailand, like many countries, has a long history of eating insects, or what is called “entomophagy.” But while many of these countries have seen a decline in insect-eaters—due in no small part to insect-eating’s negative portrayal by the West—Thailand’s insect-eating community has actually grown and diversified beyond historical levels, thanks to a changing perception of insects as food.

Today, Thailand is praised by the UN’s Food and Agriculture Organisation (FAO) as “one of the few countries to have developed a viable and thriving insect farming sector” with “more than 20,000 insect farming enterprises … registered in the country.” The sector now constitutes a multi-million-dollar frontier of farming; it is growing so quickly that it continues to outpace academic research and government oversight.

With only two years’ experience, Aunt Jai is among the new wave of Thais entering the insect-farming industry. Yet, unlike some other farmers, she was not aware of its potential, instead setting out with the simple goal of sating her daughter’s cravings.


“[My daughter] absolutely loves to eat crickets, so I thought I would buy some cricket eggs and try and rear some for her,” she recalled with an incredulous giggle. “I didn’t know what would come next.”

After receiving a small batch of various cricket eggs in the mail, Aunt Jai placed them in a small blue box and, having never been taught how to rear crickets, struggled to raise them through three months of trial and error. Eventually, she made her breakthrough and started rearing several cycles of crickets. Two months later, word of her crickets was spreading in her rural village near Don Chedi, just 80 kilometers northwest of Bangkok.

“People were coming to my farm and asking to buy some of my crickets,” she told me. Aunt Jai immediately realised the potential of her side project. “It cost me 3,000 THB ($91) to start, and after five months I had managed to make back my money, plus an extra 20,000 THB ($610)!”

She quickly invested another 100,000 THB for the 15 large concrete blocks that make up her farm today. “Today I’m making over 20,000 THB selling around 200 kilos of crickets per month. Next year, I want to double the size of my farm and begin selling to wholesalers in Talad Thai.”


Talad Thai, on the outskirts of Bangkok, is the country’s largest wholesale and retail market, located on nearly 200 acres of land. Walking amongst the hundreds of various wholesalers is a dizzying, glorious exposure to the sheer variety and quantity of foodstuffs available in Thailand.

Mountains of pumpkins shade their wholesalers from the sun, while gourds, lemons, potatoes, and tomatoes line walkways. Onions, forests of green herbs, and bundles of garlic hang off tables. Omnipresent in the humid air is that subtle sting of dried chillies in water and vinegar.

Talad Thai, and markets like it, are a common step in the supply chain of medium- to large-scale insect-farming enterprises. With this one-stop solution, farmers suddenly find it possible to sell in bulk to a wider consumer base. Talad Thai alone generates an average monthly income of over 300,000 THB ($9,150) per month through insects.

Tucked away in one area of the vegetables section is one of the market’s four insect wholesalers. Somnuek, a 54-year-old wholesaler of insects for nearly seven years, has little time to rest as he and his family work hard to serve their stream of customers.


“After awareness campaigns from doctors and the UN, I’ve definitely seen the number of consumers go up, which has in turn meant there are more farms to meet the growing demand,” he explained before quickly reaching over to a mound of slightly damp, cold silkworm pupae and calling an older passerby. “Eat this! It’s good for your joints, especially your knees.”

Gesturing to the glistening bowls of defrosting insects, Somnuek estimated that when he started his monthly profits were in the thousands. Now he always tops 100,000 THB ($3,050) per month.

“I import from Cambodia and China and export to different Thai communities all around the world,” he told me. “I have even sold 100 kilos of silkworm pupae to some Thai people in the USA.”

Thailand’s northeast Isan region, and to a lesser extent the more southern regions, have historically made up the bulk of the insect-eaters in Thailand. And while they may still constitute a majority of the consumer market, that base is quickly diversifying and expanding as attitudes change.


Dr. Yupa Hanboonsong, an associate professor of entomology at Khon Kaen University and a co-author of a 2013 FAO report on insect farming in Thailand, puts this change down to a recent effort in increasing the younger generations’ level of comfort with eating insects.

“We have been throwing food fairs, introducing new recipes, serving them in school lunches, putting the food in nicer packaging, exposing [children] to insects in a more positive way,” explained Hanboonsong. “Through this, we change opinions.”

“Fifteen years ago, this was only seen as something the Isan, the poor, and the old would eat,” said Hanboonsong. “Now, recently I saw a child who was 5 to 6 years old eating insects. I went up to her and asked, ‘Why are you eating insects?’ And she looked at me like it was such a weird question to ask! You know it’s normal to her—she’s just eating it like she would a piece of candy.”

Harn, an 18-year-old from Isan who set up his insect stall in downtown Bangkok, is able to make 20,000 THB per month with a 50 percent profit margin. “I knew I could set up anywhere and be OK,” said Harn, who gets his insects from the nearby Khlong Toei market. “Everyone buys here—all sorts of Thais, Chinese, Western tourists. I used to buy and cook them for myself, but I saw that it was becoming more popular, so I decided to sell them.”


Back in Talad Thai, Somnuek had also noticed the sudden diversity in consumers. “You get all sorts of people buying here now,” he said. “I even had a pretty famous local actress buy from me.”

The unnamed “pretty famous local actress” apparently bought a few kilos of one of the most prized insects —the bamboo caterpillar. In a nearby stall, these caterpillars were selling for 400 THB per kilo—four times the price of the house cricket. Only available seasonally through harvesting in the wild, the bamboo caterpillar is considered one of the more elegant insects to be seen eating, particularly in North Thailand.

Although the FAO estimates that Thailand has some 200 edible species of insect, fewer than a dozen are regularly eaten. Hanboonsong explains that these insects can be subdivided into two groups: farmed insects (such as crickets and palm weevils) and wild-harvested (such as bamboo caterpillars, weaver ants and giant water bugs).


For the most part, the wild-harvested insects are only available in certain regions, or during specific times of the year, and are difficult to intensively farm. As such, their scarcity drives their prices up to even beyond that of chicken, pork, or beef. With refrigeration usage on the rise, however, more of these insects are available year-round. (Frozen insects are still fine after one to two years.)

While this is positive for the consumers in the short term, it also means that some farmers have an incentive to harvest at unsustainable levels when they are available. Even at the current rate of wild harvesting, populations of both the popular giant water bug and weaver ant eggs are declining.

“We need to have the farmers join into a big group, so that we can ensure they are taught GAPs (Good Agricultural Practice),” explained Hanboonsong. “As well as changing perceptions on eating insects, we have to ensure good practice with wild harvesting and farming.”

After her months of trial and error, Aunt Jai is more than aware of the risks that come with poor farming practice. “I now ensure it’s not too crowded so as to give them space to breathe and to jump. If it’s too crowded, there is more chance that they will eat one another.”

Yet, even with all the caveats that inevitably follow a sprawling sector that bypasses government oversight and outpaces academic research, Thailand has shown that a successful trade in insects is possible, and the rewards are very real for poor, rural farmers like Aunt Jai. “Crickets paid for this farm. Crickets bought my car,” she said, pointing at a relatively new Toyota. “Cricket farming can pull you out of poverty.”

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Gaza’s Tunnel Vision

First published on Vocativ on 14 May 2014

Gaza’s infamous tunnels are at once a lifeline and a deathtrap. They connect the occupied territories with areas beyond their closed borders, freeing up trade and working as a conduit for goods to flow back and forth. But the Egyptian and Israeli governments regard the tunnels as a security threat and work constantly to detect and shut them down, so the risks for those working underground are great. They could be gassed, flooded or bombed out of the passages—if they make it out at all. While the tunnels are a necessity in many ways, the Gaza population is extremely conflicted about their existence.

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May 14, 2014 · 18:55

In Cairo’s Garbage City, Illegal Pig Farming is Coming Back

First Published in Vice ‘Munchies‘ Food Section – April 8, 2014

In Cairo’s ‘Garbage City,’ Illegal Pig Farming Is Coming BackAs I scrambled up piles of cardboard and across varied detritus, I eventually peered over a metal barrier into the porcine enclave beyond.  The two dozen or so pigs on the other side quickly scattered away to the shadows before slowly returning to where they were, munching on orange peels and the other organic materials left for them.

“Welcome to Garbage City!” yells one man below me, before continuing on in his business of compressing and packaging used cardboard. “You like the pigs?” he asks me.

Pigs hanging out on a pile of garbage. All photos by the author.

Manshiyet Nasser, or ‘Garbage City’ as it’s otherwise known, is a sprawling town of mostly Coptic Christians and lies under the Mokattam hills just slightly under five miles (8km) from downtown Cairo. With the majority of the population working in the informal recycling and rubbish collecting business, the area is home to some 60,000 ‘Zabaleen’ (literally ‘garbage people’) and the destination of some 30 percent of Greater Cairo’s daily municipal waste output—all 4,200 tons of it. Walking around the maze of streets, you occasionally pass by openings to the makeshift furnaces used for recycling; the blasts of heat and the whirr of metal reminding you exactly where you are—in essence, a recycling industry. Elsewhere, the smell—as one would imagine—is incredibly pungent. Foodstuffs and other organic matter putrefy under the hot sun, offering up an odor capable of burning the nasal hairs. It only takes about 15 minutes for the body to adjust to it, though, and eventually its power escapes you.

Garbage City is also home to the highest concentration of pigs in Egypt—around 50,000 of them. This is nearly double the number of pigs than there were the year before. It is an immense resurgence from five years ago, when Hosni Mubarak’s government culled most of Egypt’s pig population because of a swine flu scare. But even though pork farming is still illegal today, a few bold farmers are attempting to reform the industry altogether.

On April 29th, 2009, amid the growing paranoia over the H1N1 swine flu pandemic, Egypt’s government, under Hosni Mubarak, ordered the immediate slaughter of every pig in Egypt. At the time, Egypt’s agriculture ministry put the number of pigs in the country at close to 250,000.

Photo by Adam Ramsey

Despite the fact that no pigs in Egypt were found to have the new strain, and that the World Health Organization (WHO) stressed that it could not be caught from eating pork that was properly prepared, the decision went ahead. Shortly after the announcement, the government described the move not so much a precaution against swine flu, but a general public health measure. Nearly every pig in Egypt was taken to a slaughterhouse and killed, or, in several reported cases that don’t bear thinking about, either covered in acid or buried alive.

The pig farmers in Garbage City explained to me that it was now legal to own and rear pigs, but against the law to slaughter them to sell for consumption purposes. In other words, pig farming is still illegal. The loophole was an easy one to spot for the business-minded, though, and in the richer and more foreigner-friendly areas of Zamalek and Maadi, a few shops have taken to selling imported items. Slaughtered and processed overseas, the pigs are now sold to a predominantly foreign clientele living in Egypt.

Tucked away along one of Zamalek’s main roads, an otherwise unassuming alcohol shop sells an assortment of German pork products.  In full view of its entrance, a typical meat counter offers foie gras, mortadella, bacon, pork cutlets, and more.

Photo by Adam Ramsey
Above, a liquor store that sells German pork product imports

“Great pork, all from Germany,” says Atalah, an employee of the shop.  When queried on how much of the stuff they sell in a month, he estimates over 220 pounds. “There are a lot of foreigners here and they love their pork!” Assuring me of the legality of the operation, he stresses that he would never risk jail over something as trivial as pork, before continuing, in a whisper, “If you want I can get you good booze? All European stuff: beers, wine, vodka, whiskey. I have it. But keep it quiet, because it’s illegal.”

Back in Manshiyet Nasser, farmers explained the immediate problems they faced as a result of the 2009 killings. “I had around 1,500 pigs before Mubarak’s decision [to cull them].” Says Rezek, a Garbage City resident. “Then they came around and took them all; I must have lost something like 70,000 EGP ($10,000 USD) worth of pigs.”

“But it is more than just the initial money loss,” says Bekhit, an older pig farmer. “It was our way of life: It was the insurance of a monthly income, a source to pay for a wedding, not to mention good food to feed the family, you know, barbecue pork.” Barbecue pork is incredibly popular in Garbage City and it seemed to be a phrase almost everyone I met could say in English. “The pigs are great for all the organic materials we have to get rid of. We can recycle inorganic, you know, the plastics and stuff, but any leftover food would just sit there rotting,” adds Rezek.

Sitting at a café that spread precariously into the road, the men chatted about 2009 and the aftermath. “One of the most immediate things that happened was the price of beef went up. Anyone who still had their pigs would hoard them or sell them at way more than most could afford,” says Bekhit. “Before Mubarak you could buy pork from a butcher for something like 25 EGP/kg ($3.60 USD/kg). Now it’s double that.”

“It was our way of life: It was the insurance of a monthly income, a source to pay for a wedding, not to mention good food to feed the family, you know, barbecue pork.”

Raafat, a butcher in the area with 20 years of experience, estimates that he is one of six or seven butchers who continue to process and cook pork. “I actually had to start selling chicken immediately after the cull,” he explains. “There just weren’t any pigs.”

Before Mubarak, Raafat was going through about four pigs worth of pork a day. “After, it was maybe one or two a week. It is much better, but right now it’s pretty low, maybe two or three a day, but that’s because people are fasting for Easter, and the economy is a mess.”

One of the major issues he is still battling with is the lack of a certified stamp of approval from a health official. “Some people are afraid because it isn’t stamped so they don’t know what it’s like. Before the cull, there were doctors who would certify the meat—now I have to do it myself. That doesn’t worry people here, but outside of Garbage City it puts people off.”

Walking around Garbage City, it seemed as though almost every ad hoc building now had a few pigs tucked away behind the exterior, either in a makeshift sty in the back, on a rooftop, or under some stairs. “I remember when they first came [in 2009], says Bashai. “I hid two piglets in a small room in my house and had to let the others be taken and killed. It wasn’t until Mubarak was removed that things really got better,” he continued, in reference to the coup that overthrew the Islamist President in July of last year. “Under Mubarak, the government was still looking for pigs, but now there are no problems.”

Photo by Adam Ramsey
Pigs in a building in ‘Garbage Town’

Guiding me through to the back of his building, Bashai walked expertly across an ocean of bottles, cardboard, and—I couldn’t help but notice—at least two needles. I stumbled my way after him, desperately trying to not fall. His youngest son skipped past me and they both helped me into their pigpen. “I now have 60 pigs or so,” he stated with some dissatisfaction while the pigs walked around him, nibbling at his feet. “But I hope to have many more soon. Things are looking better now.”

Photo by Adam Ramsey

Rafaat agrees, saying that with the more comfortable attitude now being afforded to pork, sales can only increase. “I’m not afraid of anyone coming to arrest me over selling this stuff anymore.  I actually think the abattoirs will reopen soon.” He smiles. “I still offer chicken if people want it, but almost everyone wants the barbecue pork.”

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A History of Egypt In Graffiti

First published in Vocativ on October 7th 

Violence, chaos, deadly protests raging in the streets of Cairo. These have been the enduring images of Egypt the last three years.

But out of all this turmoil an artistic movement has thrived. Instead of AK-47s and tear gas, spray paint is the weapon of choice for these protesters.

Graffiti persists as a historical reminder, providing vivid vignettes and snapshots of Egypt’s turbulent history.

Cairo Graffiti History 01

The history of Egypt’s past three years is a convoluted, tortuous road of revolution, unrest, protest, revolution, division and more revolution. Since the January 25, 2011, uprising, the chants have changed, the flags have changed and the government has changed, three times.

Cairo Graffiti History 02

The typical lifespan of a piece of graffiti varies wildly depending on where you are in Cairo and the “real estate” value of the wall you intend to paint. Along the infamous Mohamed Mahmoud Street that leads into Tahrir Square, the large works of graffiti have a typical turnover rate of a few months, repainted (or occasionally removed by the authorities), often to keep up with the sentiments of the day.

Cairo Graffiti History 03

Meanwhile, the more obscure areas and the lesser known walls play the role of a historical canvas, their messages untouched from the moment they were stenciled, painted or crudely drawn.

Cairo Graffiti History 04
Cairo Graffiti History 05

The walls are littered with graffiti depicting a jumble of major turning points and different opinions.  As long as you know where to look—and understand a little Arabic—the past three years of revolution is depicted.

Clashes in Cairo Continue for Fifth Day

Small tags demanding justice from the Port Said football massacre trial that took place January 26, 2013—the ACAB (All Cops Are Bastards) emblem of hatred against the interior ministry.

Cairo Graffiti History 07

Above, the faces of former president Hosni Mubarak and Hussein Tantawi, the one-time head of the army. This piece was removed, but it only served to inspire another, harsher form of protest graffiti in the image below.

Cairo Graffiti History 08

Occasionally, the graffiti can serve as a healthy reminder of the fickle myopia of memory. During the massive June 30, 2013, demonstrations calling for Morsi to step down, the crowds embraced the army as one of their own again. Chants of “The People and the Army are one hand” reverberated across a packed Tahrir Square.  Nearby, the scrawl of dissent from one year prior (when the army was in charge) can be discerned. “Down with military rule” (seen in image below).

Cairo Graffiti History 09

All images by Amanda Mustard.

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Egypt’s Foreign Aid

(Photo by Mosa’ab Elshamy)

First published on VICE, here, on August 28th, 2013

Following what a recent Human Rights Watch report called “the most serious incident of mass unlawful killings in modern Egyptian history”, the international community’s response appeared to be just as divided as those within Egypt.

While Western countries condemned the disproportionate actions of the security forces, nations like Saudi Arabia applauded the self-restraint of the Egyptian army and noted their fight against “terrorism and sedition”.

Serious calls were made in the United States to consider suspending Egypt’s $1.55 billion (£970 million) in aid ($1.3 billion of which is part of the US’ Foreign Military Financing scheme). US senators pointed to a 1986 Congress appropriations bill that stated that the flow of funds to a country could be cut if its head of government was “deposed by military coup or decree” – which appears to be why Obama has thus far hesitated to define the social uprising as a coup in public.

Back in the UK, Labour have told the coalition government to “press the US to halt supplying arms to Egypt” just as Foreign Secretary William Hague has declared that “it is not for us to take sides”. The EU, meanwhile, has called for a meeting to discuss whether the €5 billion (£3.2 billion) in loans and grants it has set aside for Egypt will make it there now that Morsi has is no longer in charge.

Clearly, nothing drastic seems likely to happen soon, as the majority of Western states still wrangle over whether to impose economic sanctions on Egypt.

Since Egypt’s initial revolution began in January of 2011, the economy has been rapidly sinking. The budget deficit rose to 14 percent of GDP – the highest it has been for well over a decade – and the government continued to spend its foreign reserves on attempting to prop up a floundering currency, an act that actually left their reserves short in reaching a stipulation for the IMF loan they had longed for. Meanwhile, tourism – an important and well-established sector of Egypt’s economy – continues to suffer from the fallout of constant violence.

The threat of temporary economic suspension from Western states may have once caused concern among the Egyptian government, especially considering the state of the economy. However, the increase of aid from the Gulf States and Saudi Arabia has debilitated their influence, at least through the economic route, according to Adel Beshai, a senior professor at American University Cairo.

“It more than negates the money Egypt would lose from any economic sanctions. These countries are lavishing Egypt,” explained Beshai, who also serves as Member of the Supreme Council for Policy in Egypt.

All in all, Saudi, the UAE and Kuwait have pledged to give $12 billion (£7.7 billion) in aid. Meanwhile, Qatar – considered the strongest ally of the Muslim Brotherhood – denied accusations it would cut off aid to Egypt and has continued with the plans it made with deposed President Mohamed Morsi to provide Egypt with $18 billion (£11.6 billion) over the next five years.

Moreover, Saudi’s Foreign Minister Prince Saud al-Faisal promised that any financial gaps resulting from Western sanctions would be filled. Such a pledge immediately makes any case for economic sanctions providing leverage for the West completely redundant.

Beshai notes that, with regards to the $1.55 billion in aid that the US promises, the $1.3 billion that is designated for the Egyptian military is “part and parcel of [the Camp David Accords] and I really doubt they will risk pulling that… anyway, none of that will affect the average Egyptian on the street… it affects Israel and 200,000 workers in America instead”.

Indeed, American pro-Israel lobbying group, AIPAC, has been campaigning to maintain military ties with the Egyptian Armed Forces – yet another example of pragmatic geopolitics creating unusual bedfellows.

All rumours of the US suspending their military aid have been strongly denied by Washington, and their masterful showing of prevarication in labelling Morsi’s ousting a “coup” – they have yet to make an official statement nearly two months after the event – shows their intent in maintaining its strategic ties with Egypt without crossing any legal Rubicon.

Instead, the White House has been toying with the idea of suspending the financial aid that is not military bound, but at only $250 million (£161 million) Beshai believes the Egyptian government would “consider it an insignificant amount”.

In an interview with CNN, President Obama pointed to his “sense” that “the aid itself may not reverse what the interim government does”, but assured those watching that there is “no doubt that we can’t return to business as usual” with Egypt’s Armed Forces – though no specifics were given to what changes may be made.

As with the cancellation of the two countries’ joint military exercise “Bright Star”, the point of any punitive economic action is not to damage, but to make a point to the Egyptian military’s top brass; it’s a slap in the face without leaving a bruise.

Last week, Catherine Ashton – the EU High Representative – spoke after their “extraordinary meeting of Foreign Affairs Council on Egypt” saying, “We have agreed… that assistance to the most vulnerable groups and to civil society must continue.” Within their statement, they pointed to the EU’s relationship with Egypt and decided that the best course of action was to continue with their €5 billion (£4.3 billion) of aid due in the fiscal year of 2014.

However, EU member states did agree to “suspend export licences to Egypt of any equipment used for internal repression”.

Rejecting the sympathetic angle of the EU towards Egypt’s “most vulnerable”, Beshai instead pointed to the inherently symbiotic nature of aid: “If you give me aid, you’re not doing it because you love me. It’s mutual – it is not a one-way relationship at all.”

The overall sentiment of the current Egyptian government with regards to foreign aid appears to be one of cautious contentment. Ahmed Galal, the interim finance minister, expressed gratitude in a press conference to the “friends” who were providing aid to Egypt. He even stated that the much-desired IMF fund that shadowed Morsi’s presidential term, “is not excluded [from Egypt’s future], but is not the one that will make or break it for us”.

Beshai explained how the interim government and the army would be “cautious with what they say in public, but behind closed doors they know they will be more than alright for now”. Pointing to the markets in Asia and Latin America, he suggests that there would be absolutely no worry with the armed forces were economic sanctions to be brought upon them, not that they would claim that publicly.

“Alienating the Western states, specifically the US, long-term would be something Egypt would want to avoid,” says Beshai, “but for now they know the Gulf States and Saudi cover them well enough. I mean, even as far as the [Egyptian] military is concerned, we live in a globalised world, and right now buying military equipment is easier than buying certain brands of food. They won’t be shuddering in their boots.”

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The Economics of Ramadan

This article first appeared in the New Statesman

Downtown Cairo is a boisterous place. The ubiquitous honks of the car horns and the ebullience of peoples on the street ensure that any form of silence exists only in the memory. However, for one month a year, every year, the streets go silent and the shops close for as long as the energy sapping sun stings the eyes. This is the holy month of Ramadan.

One of the five pillars of Islam, every Muslim should abstain from drinking, eating, smoking (as well as a few other things) between Fajr prayers in the early morning and Maghreb Prayers in the dusk. The Qur’an prescribes it as a way of learning self-restraint.

The eschewing of water and food, however, means that those observing the fast are also affecting their energy levels. Simply walking down the street, the vitality that would once overwhelm me is conspicuous by its absence. Those that are out languishing under the relentless Cairo sun reply to my salutations with a half-hearted wave where once I would have been invited into conversation.

In an effort to manage this problem, the Egyptian government reduces the work hours of private sector and bank workers. The reduction and/or adjustment of work hours during the month of Ramadan takes place in almost every Muslim-majority country. But whereas Malaysia and Indonesia generally practice a one-hour adjustment, one-hour reduction scheme, Egypt practices a two-hour reduction for private sector workers, a three-hour reduction for banks, as well as a one-hour reduction in their stock exchange trading hours.

This may well ameliorate the situation of fasting with the workers, but it also means that over the course of Ramadan, the private sector loses around 40 hours of operating time, the banks around 60 hours and the Egyptian stock exchange around 20 hours of trading time.

Strangely though, the effect of losing 20 hours worth of trading time on the Egyptian stock market is minimal, if anything (see graph).  Using data from the benchmark EGX30 index – which looks at the top 30 companies in terms of liquidity and activity – between the years 2000-2006 there is absolutely no correlation between the typical monthly percentage change in stock value and the percentage change in the month of Ramadan, but it does seem to suggest that the reduced trading times has increased the market’s volatility.

The fact that Egypt releases its GDP and growth statistics in quarterly format mean any attempt to scrutinise the Ramadan periods within them is futile. However, the latest data released by the Ministry of Planning and Ministry of Finance can be examined as it covers the period from 1 June to the present, which encapsulates most of this month of Ramadan, plus 19 days of non-fasting.  In that time, the total GDP change has been -4.1%, which correlates to a recent report by the Dinar Standard – a research and advisory firm that focuses on emerging Muslim economies – which gave an estimate of an average loss of 4% to GDPs in Muslim-majority countries.

In that report, it estimated that Egypt made a loss of nearly 8% in its monthly GDP due to it’s reduced Ramadan hours, which would result in a total loss of just over US$1.4bn for last year’s Ramadan period. The reduction of hours may be necessary exchange for worker morale, but for an economy that is already struggling to attain the considerable US$22.5bn needed to finance its deficit for this fiscal year, it’s a hefty trade-off.

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