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Egypt condemned to continued chaos without its earnings from oil!

in Peak Oil by

On the ASPO Sweden website, Martin Saar has written a good article on Egypt and how declining income from oil production is a source of that nation’s current problems. It is a problem for their future. ( The text is translated into English by Michael Lardelli ).

Written by Martin Saar

Egypt has fallen into chaos again, and our traditional mainstream media once again have succeeded in missing the fundamental causes of that nation’s problems – runaway population growth, declining natural resources and a continuously worsening trade balance. Unfortunately, those factors were already obvious several years ago and are now even more severe.

According to Egypt’s central bank, for the first time, the nation has become a net importer or oil. It is now dependent on its current $2 billion worth of annual natural gas exports to purchase the difference.

In October 2012 the newspaper Egypt Independent published an article “Egypt’s Unbalance of Payments” in which it tried to explain the situation:

“Though many people worry about increases in energy and food bought from abroad, Adly [an economist at the Egyptian Initiative for Human Rights] said they do not represent the bulk of the imports.

“The main issue is not food, but inputs and intermediary products,” said Adly.

“Inputs and intermediary products are goods Egyptian manufacturers need to manufacture a final product for export or domestic consumption. They represented 46 percent of total imports in 2011/12.

“Wheat and maize, the two main imported food products, were 6.3 percent. The energy was 17 percent.

“However, food and energy imports weigh heavily on the Egyptian budget, because subsidized food and energy represented 28 percent of all governmental expenses in 2011/12.”

Meanwhile, exports of petroleum products generated a measly $1.4 billion surplus. That’s more than half of what they brought in the year before, and one-fourth of what they produced in 2009/2010.

The crisis in Egypt was entirely predictable and has slowly played out over several years. If you want to see “limits to growth” in reality, then you need to look no further than Egypt. When will those in the mainstream media begin to report the obvious, fundamental bases to the crisis?!

The solution for Egypt must be to tackle its population growth. The nation is far beyond its ability to feed its population. Egypt is a net importer of the food calories required to support its citizens (primarily wheat) and within a year or two will become a net importer of calories required for industrial consumption (oil is already in deficit and gas, and electricity soon will be). What will Egypt export in exchange?

Egypt’s prime minister explained a while ago that a ten-year plan would focus on oil and tourism as the primary sources of future income for the nation. It is very doubtful that this will save the country from widespread chaos and, in the worst case, civil war.

And what is more certain than anything else is that it is nothing more than wishful thinking that Egypt might once again become a net exporter of oil. Many people are worried about increasing imports of energy and food.

Kjell Aleklett is Professor of Physics at Uppsala University in Sweden where he leads the Uppsala Global Energy Systems Group (UGES).

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