WILL EGYPT'S SQUEEZE NEVER END?
Egypt's beleaguered private sector is wondering what is going to hit it next. It remains deeply suspicious of official attitudes toward the country's chaotic foreign exchange system following the inept performance of former economy minister Mostafa el-Saeed. He tried to crack down on the black market at the beginning of last year (Euromoney, February 1985). There was widespread panic when he blocked the free movement of proceeds on free dollar accounts. More than $800 million was said to have fled the country in the first three months of 1985.
One year later, as the private sector struggled to interpret countrary signals and cope with the country's huge and largely inert bureaucracy, stability was again threatened, this time by riots.
The riots followed the highly publicised hijacking of the Italian cruise ship Achille Lauro and the subsequent forced landing by US jets of the Egyptian airliner carrying the hijackers. Said one hotelier: "It takes just 24 hours to wreck international confidence; it takes another 24 months to restore it." The only thing that did not seem to happen was another capital flight, but then most of the fast money was already outside Egypt.