The Use of Gold as Reserve to Support the Egyptian Pound

Arab Net News reported (10/19/2016) that the Egyptian government is shipping to Canada its monthly gold production of 344KG from the Sukari mines to be purified and sold in the world market.

The Sukari mine of Egypt is classified as one of the ten largest gold mine in the world.

In some western countries such as the US, gold has been kept as reserve to back up the security and value of the dollar in the world market.

The Egyptian pound value in the Egyptian market as well as in the world market has been decreasing steadily especially in the last few years. One of the reasons is the fact that the number of US dollars in the Egyptian Central Bank has been decreasing substantially. Presently, the official rate of the US dollar is equal to 8.83 LE, while the value of the dollar in the black market is almost double the official rate (1 dollar equals 15.50 LE).

Egypt is exporting a small amount of gold. The question to be asked why doesn’t the Egyptian government put some of that gold in reserve to back up the value of its currency, and to stop decreasing the value of its pound.

This devaluation of the Egyptian pound is having an impact on the Egyptian economy. It led to an increase in the cost of living, a situation that the public is objecting to.  

The 8^th of September- International Literacy Day

The United Nations (UN) and the United Nations Educational, Scientific and Cultural Organization (UNESCO), designated September 8^th of each year to celebrate and remind people around the world to eliminate illiteracy.

Many countries worldwide have succeeded in doing so, while other countries have a long way to go.

Unfortunately, the Arab world, which consists of twenty-two states, still has high illiteracy rates.  More than 100 million people in the Arab world out of 400 million are classified as illiterate. However, the illiteracy rates among Arab states fluctuate. States with smaller population size in general tend to have high literacy rates such as Tunisia, the Emirates, Lebanon, and Jordan. Most of the states with large population size such as Egypt, Sudan, Morocco and Yemen, have a high illiteracy rates.

For example, Egypt, where one fourth of the Arab population resides, has one of the highest illiteracy rates. Egypt population now exceeds 94 million people, and more than one third are classified as illiterate.

Egypt has more than 47,000 schools, but many are unfit as places of learning. Furthermore, many of these schools run on a two-shift basis daily to accommodate children of school age. Keep in mind that Egypt adds 2.6 million newly born babies to its population per year.

Recently, the minister of education stated publically that the government needs to create more than 40,000 new classrooms to cut the number of students per classroom by half. In some of the classes, the enrollment exceeds 175 students.

Regrettable to say, education in the Arab world is not classified as priority one task. The political leadership has failed to come up with a strategy to eliminate illiteracy. For that and other reasons, many countries around the globe are progressing, while the Arab world is regressing.

President El Sessi Economic Achiements

The election of a new head of state is always scrutinized and somewhat criticized by lay people.

Less than two years ago  (7/12/2014) president El Sessi was elected by more than 24 million Egyptians who constitute half of the eligible voters.

Following the president’s election, negative campaigns by some journalists and politicians started to emerge. They maintained that the new regimes was authoritarian and had no economic planning.

In my opinion this is a misplaced criticism. The president and his government are facing tremendous challenges: terrorism, lack of foreign currency, decreases of tourism by   80%, meager economic economic resources, and above all the continuous population increase.

If we examine the transitional political and economic period following any revolution one notices that political and economic stability is not achieved instantly.

President El Sessi has been in power for less than two full years, and in spite of the poor economic situation he inherited from the previous regime and the continuous threat of terrorism, his achievement is quite impressive.

The followings are an enumeration of his achievements.

1.   The development of the Suez Canal, which took one year to complete at a cost of 60billion Egyptian pounds.

2.   The construction of more than 5000 Km of new roads.

3.    The construction of 1500 bridges. This new transportation network connects the various governorates.

4.   The construction of 6 new towns to allow urban expansion, economic development and to accommodate the increasing number of the population. It is estimates that 2.6 million people, per year, are added to the Egyptian population.

5.   The modernization of the electrical power generators. A German company builds the new generators and it led to the doubling of power. It exceeds 26,000-mega watt.

6.    The construction of 600,000 housing units to accommodate low-income families.

7.   The construction of new sewage pipes, with recycling stations, in several villages. This will provide clean water for irrigation and make available 3.7-7 billion cubic meter of water per year.

8.   The reclamation of 1.5 million feddans in Al Farafra. It is a large agricultural project, which is expected to be completed in 4 to 5 years at a cost of 60 bullion Egyptian pounds. According to agricultural economists the project Egypt will be self sufficient in food production, especially the production of wheat. On 5/5/2016, president El Sessi visited Al Farafra to celebrate the hisad of wheat from 5000 reclaimed feddans. Furthermore, villages are constructed with basic infrastructure for those who will be working the land, and wells were dug to provide water for agriculture and human consumption. It is estimated that the water well will provide 7 billion cubic meters of water per year.

9.   Electrical power in this region will be provided by means of solar energy.

The above are among the major economic developmental projects president El Sessi has initiated with the help of the Egyptian army.

This is an impressive achievement in light of the short time he has been in power and considering Egypt poor economic resources.

On May 9, 2016 the Egyptian newspaper Akhbar el Yom published the result of a national opinion survey regarding president El Sessi after being in power for 22 months. It revealed that 79% of the respondents are supportive and satisfied with the president performance and 13% are not satisfied.  However, 69% of the respondents said they will re-elect El Sessi for another term.

  

USA Support of Israel

Recently, the Israeli prime minister, Netanyahu, stated that the occupied Syrian Golan Height is part of Israel. This occupation is violating the UN resolution as well as international law.

Since its creation, the US government has supported the Israeli aggression.

Few days ago the NYT stated that President Obama’s administration has constantly supported Israel by, more than any other American president, by using its right to veto any resolution  at the Security Council, which is against Israel.

The rejected resolutions and the Israelis ignoring international law, allowed them to increase their aggression against the Palestinians. They demolished thousands of Palestinian homes as part of their ethnic cleaning strategy. Furthermore, 85% of Palestinian lands are under Israeli rules.

The US policy has been the major factor that has contributed to the rise of international terrorism.

Political Influence of AIPAC

The American Israeli Political Affairs Committee (AIPAC) is the strongest and most influential political lobby in the USA. Some of its member, 18,000, met recently in Washington D.C.

The Committee (AIPAC) extended its invitation to the five presidential candidates to attend their meeting and to express their political views towards Israel.

The only candidate who did not attend the meeting was Senator Bernie Sanders.

During his campaign, Senator Sanders criticized the Israel government policy towards the Palestinians. He called for an end to Israeli occupation of the West Bank and an end to the blockade of the Gaza Strip. Furthermore, Senator Sanders criticized Mr. Netanyahu for not understanding Palestinians needs, and called for the creation of a Palestinian State, stating that we cannot be 100%supporter of Israeli policy and ignore the rest of the region. It should be stressed here that Senator Sanders is Jewish.

The other four candidates, Clinton, Trump, Cruz and Kasich promised more military and economic aids to Israel. Kasich went so far as to say the Palestinians are terrorists.

Most of the American politicians, since the creation of the State of Israel, lacked objectivity. This becomes more apparent during election time. They ignore American national interest in order to be elected.

Such foreign policy contributes immensely toward the rise of international terrorism.

The Corrupt American Congress

The month of March will be always remembered as the month the US invaded Iraq 13 years ago.

Unfortunately, only one American politician, senator Cruz, stated publicly that the invasion of Iraq destabilized the Middle East region. He furthermore said that the removal of Saddam Hussein was a mistake because under his rule Iraq was stable.

Senator Cruz and do not support him made a correct statement. However, he did not elaborate on the invasion, which led to the killing of more than one million Iraqi civilians, and the destruction of Iraq physically, economically and politically. It also led to the creation of ISIS. He also did not refer to the killing of more than 4500 American soldiers. They died in vain!

Furthermore, Cruz did not bring up the fact that Bush’s invasion was based on fabricated false reports, which he used to misled Americans, and justify the Iraqi invasion.

George Tenet, Director of the CIA, stated publicly “Iraq posses no weapons of mass destruction and Saddam Hussein does not pose threats to the US.”

It is regrettable that the US Congress ignored the CIA report and surrendered to lobbyists’ s pressure supporting the Iraqi invasion.

For more information see The US Invasion of Iraq: Conspiracy and Its Tragic Aftermath. Amazon publication, 2014

Egyptian Pressing Need

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During the third week of January (1/18/2016), several Egyptian newspapers reported that the minister of ‘al awqaf’ is supporting the building of 10 new mosques in 10 governorates.

Is this a priority and a pressing national need? Top government officials are still not aware what are the real needs of the country.

I would like to stress that there are already ten of thousands mosques all over Egypt, hence efforts should be directed to the real pressing need in Egypt, SHORTAGE OF SCHOOLS, especially in rural Egypt. This is, of course, reflected in the high level of illiteracy.

Aren’t those officials, who advocate the building of more mosques, aware of the famous Quaranic imperative verb “iqra’”?

The Quran advocates learning and the pursuit of knowledge. How can this be achieved with the lack of education in many parts of Egypt? Actually, the pursuit of learning is the best method that can be used to fight false interpretations of Islam, as well as to fight terrorism. Hence, education and the advancement of learning should be the first priority of the Egyptian government.

The following statistics was recently published by the Egyptian Census Department.

1: there are 4655 villages in Egypt.

2: there are elementary schools in 95.3% of Egyptian villages, but there no secondary schools (high schools) in82% of those villages. Hence, 60% of the villages need the construction of more schools. It was also reported that some schools operate on two shifts basis. Furthermore, the census data reveals that only 3.8% of Egyptian villages have public libraries.

There are more than 47,000 schools in Egypt. More than 40% of those schools are quite old and not fit for the advancement of learning.

The Egyptian educational system, especially at the lower level, is definitely not meeting the challenges of the 21-century.

The lack of resources, and of qualified teachers is mentioned as being the major reasons for the lack of a good educational system.

However, there are different ways of rectifying the educational system and ensure its future success. The simplest one is to divert the subsidies of oil to education.

During the early 1960s the educational system of Egypt was more advanced than that of South Korea. But, there was an awakening in South Korea and the government started to allocate 20% of its budget to education and research.

The result of such measure placed South Korea among the most advanced nations.

Let us hope Egyptian officials use this example to further the development of the educational system in Egypt.

Egypt's High Rate of Population Growth

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President El Sessi of Egypt has recently addressed the nation regarding the national and international accomplishments achieved in Egypt during the past 18 months.

 What was of interest to me as social scientist was his emphasis on population growth? He stated, “ Egypt is facing a ticking bomb.”

He, of course, was referring to Egypt high population growth. “There are 2.5 million new babies per year”.

According to the Egyptian census record, by the end of December 2015, the total population will be 90 million people. This figure excludes the 8 to 10 million Egyptians working outside Egypt.

I would like to stress here that if the population growth continues at the same rate, Egypt would add another 30 million people during the next 10 years. Hence, by the year 2025 Egypt population will reach 130 million!

Such population growth would be a great challenge facing the Egyptian society, and would require serious consideration from the government regarding the policy made to fulfill the people’s basic needs. Such needs are: education, shelters, health care, food, and higher wages.

In order to fulfill the educational need for the 2.5 million additional people, 2000 new schools should be built.

 Even without such an increase the present schools are in pitiful conditions. More than one third of the 47,000 schools in Egypt now, are unfit to be used.

The Egyptian Minister of Education, while referring to the high density of students in classes, admitted that there is a need to create 58,000 new classrooms in order to lower the number of students by half in each class. The large number of students in each class led to a low quality of education and to the drop out of students as mentioned in the Egyptian newspaper al masrawy (November 1, 2015).

As a result of the poor quality of education in schools,  some parents are obliged to hire private teachers to help their children graduate. The Egyptian government has estimated the coast families face to pay for private lessons exceeds 16 billion Egyptian pounds per year!

It is a fact that there is a correlation between the quality of education and economic growth. From an economic and demographic theoretical model the 2.5 million increase in population per year, requires the national economic growth

to be at least 5% to 7% increase per year.

Egypt’s population growth has already reached a critical stage, 94% of its population is living on 6% of the total land. Hence, the Nile Valley and the Delta regions have the highest population density in the world.

One should also stress the fact that fresh water in Egypt has been decreasing to 600 cu.met. per person per year. Egypt has reached the poverty level in regard to water availability.

As a result of the minimal availability of water and land suitable for cultivation, Egypt is forced to import 7 million metric tons of wheat per year and the government is subsidizing the bread at a cost of 24 billion Egyptian pounds per year. Furthermore, the government subsidizes energy, transportation and other basic food items.

This policy of subsidy led to the continuing increase in the internal and external debts. The internal debts have been estimated to exceed 2.11trillion Egyptian pounds, and the foreign debts around 45 billion dollars.

The problem of population growth in Egypt has been acknowledged since the early 1950s.

Presidents Nasser, Sadat. Mubarak and now El Sessi have all advocated family planning policy.

In addition to the government’ policy, Al Azhar institution has also supported family planning programs. However, such programs were never successful.

I would like to conclude by stating that the Egyptian government should seriously review its family planning and birth control programs in order to curtail population increase.

For more information on population growth in Egypt, check my blog: http://mid-east-today.blogspot.com