x Abu Dhabi, UAEFriday 21 July 2017

Bitter economic pill is one Egypt must swallow

Egyptians may not like Mr Kerry, but his advice needs urgently to be heard, and heeded.

'Kerry of the Muslim Brotherhood is in Egypt" read the protesters' posters. Each one featured a caricature of America's new secretary of state as a heavily bearded Brotherhood member.

The demonstrators, outside the foreign ministry in Cairo, were angry at John Kerry's appearance in the capital at the weekend. Talks with Egypt's president, Mohammed Morsi, could only underscore the Brotherhood's power, the protesters believed.

America's relationship with Egypt is complicated. The US spent three decades propping up the authoritarian state of Hosni Mubarak, and Egyptians have not forgotten that. At the same time many Egyptians, particularly those inclined towards secular government or against the Brotherhood, would have preferred not to see the US stamp of approval on the presidency of Mr Morsi, even though he was elected fairly.

But how can the US be expected to ignore Egypt or its new ruling party? The key reason that led Barack Obama to speak in Cairo in 2009 remains valid: Egypt is an indispensable country in the Arab world. A dialogue with Egypt is vital to a dialogue with the rest of the region.

But in a dialogue, both sides need to listen. Egyptians may not like the messenger, but Mr Kerry's advice needs urgently to be heard, and heeded. And when the top American diplomat says Cairo needs to rapidly conclude talks with the IMF, he is stating Egypt's best interests.

The $4.8 billion (Dh17.6bn) IMF loan, being negotiated after many delays, comes with a host of conditions, including cuts in consumer subsidies on food and fuel. Lifting subsidies at a time of economic hardship for many millions of Egyptians will be unpopular. But some movement is needed.

Moreover, the value of the IMF loan is not measured merely in dollars. More than immediate cash, what Egypt needs is stability and the perception of stability. Settling the IMF loan would send a signal that Egypt was open for business. Then, in spite of the uncertainty on the streets, Egypt's leaders could decide a course and commit to charting it for years. Such moves would steady the nerves of investors, business owners and potential tourists as well.

That was Mr Kerry's message, but should he have said it quite so loudly? No matter how wise and prudent a piece of advice may be, sometimes it is better delivered softly and in private. The US-Egyptian relationship is evolving, and both sides must learn to respect the limitations of the other.