Egypt’s middle class faces hardship as austerity bites

A picture taken on March 7, 2018 shows posters supporting Egyptian President Abdel Fattah El-Sisi hanging in a street in the downtown Cairo district of El-Gamaleya, where he was born. (AFP / KHALED DESOUKI)
Updated 21 March 2018
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Egypt’s middle class faces hardship as austerity bites

CAIRO: Teacher Abdelrahman Ali wonders if he will be able to afford diapers for the second child his wife is expecting. He can no longer put meat on the dinner table and has to borrow money from his mother-in-law as hard times bite in Egypt.
Ali and other middle class Egyptians — the social backbone of successive governments — are bracing for more hardship after an election next week. President Abdel Fattah El-Sisi is widely expected to win a second term.
“With our first pregnancy, we bought all we needed to prepare ... but this time around, we’re leaving it in the hands of God. It’s very difficult,” said Ali, who teaches Arabic at a private school.
El-Sisi’s only challenger in the election leads a party that has expressed support for the president, while other candidates have dropped out, complaining of intimidation. The election commission has promised a free and fair vote.
El-Sisi has repeatedly urged Egyptians to be patient and make sacrifices for their country while the economy recovers. But political analysts say he has to be careful in dealing with the middle class, whose savings have been devoured by skyrocketing prices during his four years in office.
It was the middle class that invaded Cairo’s Tahrir Square in 2011, triggering the protests that toppled President Hosni Mubarak.
Middle-income Egyptians also staged mass demonstrations that ended with the army, led by El-Sisi, toppling Muslim Brotherhood President Mohamed Mursi in 2013.
Their votes then helped El-Sisi become president the following year, but his popularity has waned.

Reforms
Faced with the need to fix Egypt’s public finances, El-Sisi agreed to economic reforms under a $12 billion International Monetary Fund loan package.
Egypt floated the pound in November 2016, and the currency lost half its value, pushing inflation to record highs over 30 percent last summer as energy prices soared. That compared with an increase in wages of about 15 to 20 percent over the past year, according to economists.
People like Ali, who could once afford a car and vacations abroad, are still having to cut costs and manage one financial crisis after another as they become ever poorer.
His family’s combined income of 4,000 pounds ($228) a month will amount to 33 pounds per day per person when his second child is born — less than $2.
Beef is too expensive and the only chicken Ali can afford is inedible. “After it was boiled, the chicken would turn blue,” he said. “We bought it once and were scared to buy it again.”

No signs
Since Egypt signed the IMF agreement and introduced reforms, foreign reserves have doubled, foreign investment has slowly returned and economic growth begun to recover.
IMF and World Bank economists praised the government for the reforms and for shielding the poorest from the fallout, but that has not helped middle-income Egyptians.
A simple home repair can cost Ali’s family more than half its monthly income.
“The hardest thing at the moment is when something happens at home, suddenly, like a problem with plumbing,” said Ali. “In that case, I have to borrow money to fix it.”
Shopping also has it problems.
“When I used to go to the nearby market with 50 pounds, I’d buy everything I needed, and they could last maybe two to three weeks. But now I take 150 pounds and spend it and feel like I didn’t buy anything,” Ali said.
There are no signs that the middle class is about to stage demonstrations, but some analysts say El-Sisi’s government knows current conditions could push people onto the streets again.
“While I doubt the middle class will protest in large numbers in the near future, their main grievance that would drive them to do so would be economic hardship,” said Timothy Kaldas, non-resident fellow at the Tahrir Institute for Middle East Policy.
El-Sisi has promised that cuts in state subsidies will help revive the economy, promote long-term growth and attract foreign investment. But that comes with a price.
“As with any austerity package, things are expected to get worse before they get better,” said Amr Adly, a researcher with the Middle East Directions Programme at the European University Institute.
“The IMF will remain in charge of Egypt’s economic policies for the coming four to five years.”
No relief is in sight for Ali and his relatives.
The family used savings to invest in a small videogame lounge that generated some cash. But as austerity started to bite last year, they had to shut down the business because customers could no longer afford to visit.
“I had four playstations and six or eight computers and a pool table. I sold everything two months before things became expensive, so I lost a lot of money,” said Ali.
“We’ve had to give up a lot of things. You know things — what does El-Sisi call them? Luxury,” said Ali’s wife Sarah, who works at a nursery school.
“Like we used to buy certain shampoos or oils. These were specific things that I can no longer afford.”
Ali is paying scant attention to an election with only one serious candidate. He worries more that soaring prices mean his second child will have to be less pampered than the first.
A pack of diapers for their daughter Talia cost 57 Egyptian pounds when she was born two years ago. Now, with the new baby imminent, the price is 135 pounds ($7.68).
“If it’s a girl, she can take Talia’s clothes,” said Ali.


Cybersecurity firm: More Iran hacks as US sanctions loom

Alister Shepherd, the director of a subsidiary of FireEye, during a presentation about the APT33 in Dubai Tuesday. (AP)
Updated 20 September 2018
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Cybersecurity firm: More Iran hacks as US sanctions loom

  • The firm warns that this raises the danger level ahead of America re-imposing crushing sanctions on Iran’s oil industry in early November.
  • Iran’s mission to the UN rejected FireEye’s report, calling it “categorically false.”

DUBAI: An Iranian government-aligned group of hackers launched a major campaign targeting Mideast energy firms and others ahead of US sanctions on Iran, a cybersecurity firm said Tuesday, warning further attacks remain possible as America reimposes others on Tehran.

While the firm FireEye says the so-called “spear-phishing” email campaign only involves hackers stealing information from infected computers, it involves a similar type of malware previously used to inject a program that destroyed tens of thousands of terminals in Saudi Arabia.

The firm warns that this raises the danger level ahead of America re-imposing crushing sanctions on Iran’s oil industry in early November.

“Whenever we see Iranian threat groups active in this region, particularly in line with geopolitical events, we have to be concerned they might either be engaged in or pre-positioning for a disruptive attack,” Alister Shepherd, a director for a FireEye subsidiary, told The Associated Press.

Iran’s mission to the UN rejected FireEye’s report, calling it “categorically false.”

“Iran’s cyber capabilities are purely defensive, and these claims made by private firms are a form of false advertising designed to attract clients,” the mission said in a statement. “They should not be taken at face value.”

FireEye, which often works with governments and large corporations, refers to the group of Iranian hackers as APT33, an acronym for “advanced persistent threat.” APT33 used phishing email attacks with fake job opportunities to gain access to the companies affected, faking domain names to make the messages look legitimate. Analysts described the emails as “spear-phishing” as they appear targeted in nature.

FireEye first discussed the group last year around the same time. This year, the company briefed journalists after offering presentations to potential government clients in Dubai at a luxury hotel and yacht club on the man-made, sea-horse-shaped Daria Island.

While acknowledging their sales pitch, FireEye warned of the danger such Iranian government-aligned hacking groups pose. Iran is believed to be behind the spread of Shamoon in 2012, which hit Saudi Arabian Oil Co. and Qatari natural gas producer RasGas. The virus deleted hard drives and then displayed a picture of a burning American flag on computer screens. Saudi Aramco ultimately shut down its network and destroyed over 30,000 computers.

A second version of Shamoon raced through Saudi government computers in late 2016, this time making the destroyed computers display a photograph of the body of 3-year-old Syrian boy Aylan Kurdi, who drowned fleeing his country’s civil war.

But Iran first found itself as a victim of a cyberattack. Iran developed its cyber capabilities in 2011 after the Stuxnet computer virus destroyed thousands of centrifuges involved in Iran’s contested nuclear program. Stuxnet is widely believed to be an American and Israeli creation.

APT33’s emails haven’t been destructive. However, from July 2 through July 29, FireEye saw “a by-factors-of-10 increase” in the number of emails the group sent targeting their clients, Shepherd said.