International Herald Tribune Daily News Egypt
July 5 2011
Cairo: In the salons the tassel-loafer lounge lizards glad-hand groupies. Revolution? A bump in the road, they bluster. The tables will turn, you’ll see.
Or will they? The government is calling the bankers’ bluff.
Send the players to the video store to find out which hand to play this week.
In The Cincinnati Kid (Steve McQueen) has The Man (Edward G. Robinson) in a bind. Flushed after Lady Fingers deals him winning hand after winning hand in five-card stud poker, the Kid gambles all on a full house – aces over tens. The Man pulls a cigar, slowly lights up and turns his cards. His straight flush wins.
Cairo’s matchup of the Central Bank and the bankers has the business community spellbound.
The Central Bank is at the table with less than $27.2 billion in the Central Bank’s foreign reserves – mainly collected in Suez Canal fees and gas exports. That’s considerably less than on New Year’s Day when they had $36 billion. The private bankers had $7 billion reserves to welcome in the New Year, only $3.5 billion by end of January, which was all but depleted by the end of February.
Why? Come the revolution, all manner of people wanted to convert Egyptian pounds into dollars, sterling and Euros: people leaving the country, speculators fearing a financial crisis, people selling stocks for foreign currency.
And customary commerce ground to a halt. Foreign currency earnings fell precipitously. By the end of May, the Central Bank’s reserves were down $10 billion to $26 billion and the private banks’ foreign currency reserves had dried up.
The finance ministry has enough foreign reserves to cover the next five-and-a-half months’ obligations. That’s OK. But, if factories, tourism and commerce don’t pick up they’ll be left with only enough to cover three months – situation critical.
Side-by-side is an emerging cash flow issue. The government offers T-bills to raise money to pay wages and the like. The government is trying to raise EGP12 billion on average almost every week in this way.
They were succeeding until 2 weeks ago. The buyers only bid for 75 percent of the money the government wanted. On June 26 only 44 percent of the money being sought was acquired. Last Thursday the Central Bank canceled auction for EGP6 billion after the banks demanded higher yields.
Who’s bluffing? In the movie The Man stares down the Cincinnati Kid: You’re good kid. But as long as I’m around you’re second best.
What’s the government got up its sleeve? They can borrow from abroad, if not from the International Monetary Fund, other sources can be tapped. The World Bank is still ready to lend to Egypt. More bilateral aid is anticipated. Also, the government can borrow internationally through Eurobonds backed by the US for example.
Also the government has reduced spending plans significantly and is restructuring energy subsidies to narrow its fiscal deficit. Once the economy is back on track, they believe, taxes, which represent about 60 percent of total revenues should increase. Taken together the government’s borrowing requirements should reduce.
On the street, Cairo is like the Thrilla’ in Manila, the all time greatest boxing match. Muhammad Ali and Joe Frazier matched up for the Heavyweight Boxing Championship of the World on October 1, 1975.
Ali came out spunky to ‘put a whuppin’ on Joe Frazier. At the beginning of the seventh round, Ali whispered in Frazier’s ear: Joe, they told me you was all washed up. Frazier growled back: They told you wrong, pretty boy.
Blood everywhere, Frazier was eventually carried out at the end of Round 14.
Cairo’s bloodbath harrows. Whatever grievances Cairo’s brawlers bear – whichever side they’re on – nothing warrants besmirching Egypt’s revolutionaries’ dignity.
Is latent brutality being unlocked? Is pent-up frustration welling up and out?
The Supreme Council of the Armed Forces said the fighting last week was a manifestation of plots aimed at shaking Egypt’s security and stability. Plotters were using the revolutionary martyrs’ blood to drive a wedge between the people and the security forces.
That’s unhelpful, inappropriate vituperative invective.
The military is tasked with peacekeeping, not name-calling. When they open their mouths, they should stick to facts. Or better, present their evidence for examination in civilian courts where denunciators can be cross-examined.
The Hustler is a morality story worthy of Cairo’s former first family. Fast Eddie (Paul Newman) wins $18,000 playing pool against Minnesota Fats (Jackie Gleason) then loses everything but $200.
The film’s director Robert Rossen said Fast Eddie yearned to be a great player. But, he said, the film is really about the obstacles encountered attempting to fulfill himself as a human being.
He attains self-awareness only after the personal tragedy of losing the girl he loved through his own stupidity – which Roger Ebert the film critic says is accepting reality, forsaking dreams.
Irony heaped on irony. The Hustler hired street thugs and enrolled them in the Screen Actors Guild to play extras.
Are Cairo’s louts acting on their own, or working for a group hell bent on obstructing democracy?
Philip Whitfield is a Cairo-based writer. He can be reached at email@example.com or twittered @mohendessin.