News Analysis: Turkish warning of Egypt's economic collapse "exaggeration"

Turkish Foreign Minister Mevlut Cavusoglu said in recent comments that the Egyptian economy is in a very fragile state and could collapse without outside support.

In response, experts here said the country's economy, with its diversified potentials, is likely to survive despite problematic.

SOMEHOW WEAK

"The country's economy is relatively weak, since Egypt has encountered two uprisings, political chaos and security instability, in addition to an administrative structure burdened with accumulated corruption," Fakhry el-Fiqy, former advisor with International Monetary Fund (IMF), said.

"Egypt's economy suffers financial disorders figured in aggravating deficit, increasing public debt, high rates of inflation and deficit in the balance of payments," the IMF's expert told Xinhua.

Egyptian foreign currency reserves have dropped from 36 billion U.S. dollars in the aftermath of the 2011 revolution to 16.56 by the end of March.

Political turmoil has forced investors to flee, and dragged tourism downwards. The Suez Canal has also seen declined revenues as a result of slow global trade, which has further worsened the currency shortage. And that made the North African nation thirsty for foreign support.

Since President Abdel Fattah Al-Sisi came to power, Egypt has received nearly 35 billion dollars in Gulf aid and investments.

"For curing the economic illness and distortion, Egypt needs funds to implement reforms, and to compensate the sharp decline in tourism, foreign investments, expatriates remittances revenues," el-Fiqy explained.

"Loans, not aids and investments are common factors in nursing sick economy in any country," he added.

ECONOMY NOT COLLAPSE

However, el-Fiqy noted that Egypt is an agricultural country with diversified sources of incomes and its economy will revive in less than ten years, even without foreign aids.

"Collapse of the Egyptian economy is impossible," said Yasser Gad, economic professor with Helwan University.

Gad added that the economy witnessed relatively improvement, noting that Egypt has been offered soft loan rather than aids by the regional countries, the Gulf States in particular. "Investment in Egypt is very profitable for the loan lenders."

"Even the big economic powers, that have billions of cash reserves in the world, depend on loans," Gad reiterated.

Nevertheless, Gad agreed with the IMF's expert that Egypt's economy needs at least three years to start recovering, and ten years to work without loans.

EGYPT'S REGIONAL POWER

Gad sees the Turkish comments signal "exaggeration" despite his admittance of ailing economy.

"Egypt is a big market and should remain strong for the interest of the region," Gad told Xinhua.

"Egypt and the Gulf security are always dependable," el-Fiqy added, pointing out that "It is normal that the Gulf provides Egypt with funds to survive."

He echoed Gad by saying that "the Turkish FM's comments are deeply biased and baseless," given the fact that Egypt hasn't even collapsed during the hard times of wars.

Relations between Turkey and Egypt took a blow when al-Sisi, then the Egyptian army chief, ousted the Muslim Brotherhood affiliated President Mohamed Morsi in 2013.

Turkish President Recep Erdogan, who is closely aligned with the Muslim Brotherhood, then condemned Egypt for sentencing Morsi to death.

Both countries recalled their ambassadors for consultations in a tit-for-tat policy.

Mohamed Ghobashy, vice president of Arab Center for Political and Strategic Studies told Xinhua "Egypt is a balance state for the region. The world big players, even the U.S., realize that fact."

"Egypt is a pivotal country for the stability of the Middle East despite of its economic hardships," Ghobashy said.

He added the Egyptian army, which ranks the 12th place worldwide, is very strong and constitutes a corner stone for the Gulf security.

The expert also said that Egypt, along with the regional Arab countries faces the same ugly face of terrorism, and they work together to eradicate it.

"The ties with the Gulf States are special and comprehensively strategic in all fields," he added, ruling out Egypt's collapse at the economic level.

The Turkish FM comments emerged from disagreement background between the two sides over the Islamist Brotherhood group, outlawed by Egypt and greatly supported by Turkey, he explained. Endit