A lot of the jokes going around these days revolve around the idea of procuring a huge loan from a bank, then escaping with it on the first plane out of the country. Even Naguib Mahfouz has been in on the laughs. When the Nobel laureate recently received a million pound check from Dar El-Sherouk owner Ibrahim El- Mo'alem for the exclusive rights to publish his work on the net, the novelist couldn't resist quipping, "Now I can escape with the money."

We all laughed at his wit and nodded in approval. We all know that the economy isn't doing very well, and repeat the words "recession" and "liquidity squeeze" to indicate that we understand. Meanwhile, we watch in shock as the value of the dollar rises wildly. But why is it happening? More importantly, what's really happening?

For the man in the street, evidence of the recession is visible in empty shops and the fact that practically everything can now be bought in installments. But the real poignancy of it all lies in the fact that there is no consensus in diagnosing the causes of the recession. Consequently, the prescription remains vague.

Despite repeated government assurances that the economy is doing well, business experts warn of worse days ahead, specifically, of the imminent devaluation of the Egyptian pound. When found this week, the dollar was worth around LE3.90. Although it had been fluctuating over the past few months between LE3.34 and LE3.74, the higher numbers now seem to be a fixed and painful reality. According to Mohammed Baher, a financial analyst, and many others in the know, "with the way things are, very soon the dollar will reach LE4."

An import frenzy that wasn't countered with a viable export strategy has been blamed as the primary cause for the dollar shortage. Take the fancy supermarkets mushrooming everywhere. Packed with imported commodities of everything you can think of -- from canned American fuul to Mexican chili dips -- local goods seem to have disappeared from the shelves completely.

But countless other reasons for the shortage have also been suggested by all and sundry. One widespread view argues that the billions of pounds invested in the so-called 'national projects' are the primary causes of the liquid squeeze. Why, people ask, has LE2.5 billion already been spent on the unfinished Toshka desert reclamation scheme when temperatures in that region hardly ever fall below 50 degrees centigrade? And what about the multi-billion dollar Nile Sat satellites that are supposed to ensure Egypt's role as the region's "media pioneer?" Despite the official rhetoric, everyone seems to still be watching other Arab satellite channels.

Meanwhile, the press continues to bombard us on a daily basis with reports of businessmen fleeing the country with billions drawn from banks. According to Prime Minister Atef Ebeid, only twenty businessmen have fled the country and the impact of their escape is far less than the circulating "exaggerations".

Still, one can't help but feel that the lack of transparency in the information released to the media on all these issues has only helped to make the situation even foggier. Take, for instance, the strange case of the most famous of the run-away businessmen, the true icon of the fleeing tycoons, 36-year old Rami Lakah, who suddenly re-surfaced in Egypt last month. Other than informing us that he is now campaigning for the upcoming parliamentary elections, the press is silent about the effect of his return on the ailing Egyptian economy.

Is this all supposed to mean anything? Or is everyone getting the wrong signals?
Stockbroker Youssef Khalil offers a reasonable explanation. For some reason, he says, a few years ago a great many businessmen were overly optimistic, and took huge long-term loans from the banks to construct giant projects. The banks were optimistic as well and hurriedly joined in. This was all in parallel with the national projects and the importing frenzy. Then, when the tycoons fled, one after the other, defaulting on their loans, there was a state of panic. This caused those who had no real confidence in the economy (No small number of businessmen, says Khalil) to immediately transfer all their Egyptian money to US dollars.

"Now the danger is in the next step people might take – transferring their money to overseas banks," warns Khalil.

All I can say is: at least the government has stopped talking about "a boom."



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